New Zealand’s economy grew 0.2% in the December 2025 quarter with rental, hiring and real estate services the largest contributors

New Zealand's economy grew 0.2% in the December 2025 quarter, according to Stats NZ.

The figure was down on a downwardly-revised 0.9% GDP figure for the September 2025 quarter, but does mean the country has recorded three quarters of growth now in the past four.

The 0.2% figure for the December quarter is, however, well below the Reserve Bank’s 0.5% projection.

Stats NZ general manager and macroeconomic spokesperson Jason Attewell on Thursday, acknowledged the GDP data released on Thursday would not reflect the impacts of what was going on in the Middle East and said the data agency was working with its customers on what they needed in terms of high-frequency data. 

In the lead up to to the Thursday release Kiwibank economist Sabrina Delgado had said the latest GDP data would be particularly stale. With us now three months into 2026, Delgado said the escalating conflict in the Middle East and the resulting lift in oil prices have added downside risks. 

“Both global and New Zealand growth could go south from here.”

So in that context, Delgado said: “It’s probably going to be one of the most dated report cards in recent memory.”

The latest figures mean NZ recorded 0.2% annual growth in GDP and Stats NZ said this was the first time since the year ending September 2024 that the economy had recorded annual growth.

Most industries recorded an increase in economic activity in the December 2025 quarter. 

The size of the economy was $445 billion for the year ended December 2025. 

Before Thursday’s GDP announcement, economists from the major banks had forecasts ranging from a 0.2% to 0.4% rise, while as mentioned above, the RBNZ, in its February Monetary Policy Statement, projected 0.5%. 

For the December quarter, rental, hiring and real estate services were the largest contributor to the overall increase in GDP, up 0.8%. 

Retail trade and accommodation was up 1.3%, led by pharmaceutical and other store-based retailing. Financial and insurance services were up 1.5% driven by banking and finance. 

Information, media and telecommunications was up 1.9% while arts, recreation and other services was up 2.0%. 

Attewell said “spending by overseas visitors to New Zealand increased in the December 2025 quarter, contributing to a 7.8% rise in travel service exports”. 

“This flowed through to parts of the economy that service tourism, such as rental car hire, retail trade and accommodation.” 

Construction, however, was the largest downward contributor to GDP this December quarter, falling 1.4%. 

Attewell said the volume of building work put in place, a key input into how Stats NZ measures GDP was matched by a similar increase in New Zealand’s population. 

Per capita flat, expenditure up 0.1%

GDP per capita was flat in the December quarter as the overall increase in GDP was matched by a similar increase in New Zealand’s population

The expenditure measure of GDP rose 0.1% during the December 2025 quarter, following a 0.9% jump in the September quarter.

Central government final consumption expenditure had an average annual growth 2.5%, which was caused by social assistance benefits in kind and a decrease in sales (this has an upwards contribution to the overall movement). 

Its 2.2% rise in the December quarter was due to an increase in health goods and services bought on behalf of households.

The December quarter saw a change in inventories increasing by $229 million – this was driven by manufacturing. 

Household consumption expenditure was down 0.1% this December quarter while expenditure on services also fell 0.1%. This decrease in services expenditure was led by reduced spending on recreational services and sea passenger services. 

Expenditure on non-durables fell 0.2% while expenditure on durables was flat. 

Gross fixed capital formation had an average annual decline of 2.1%, driven by plant, machinery and equipment, and transport equipment. 

Exports were up 3.4% annually while imports were also up 3.4%. 

Real purchasing power flat in December quarter

Compared to the September quarter, real gross national disposable income was flat and real gross national disposable income per capita fell 0.2%. 

When it comes to the 12 months to the December quarter, annual real gross national disposable income rose 1.5% and real gross national disposable income per capita was up 0.9%. 

Real gross national disposable income measures the volumes of goods and services that New Zealand residents command over – so, real purchasing power of the country’s disposable income, according to Statistics New Zealand. 

This is also impacted by changes in trade, New Zealand’s net investment income and net transfer flows with the rest of the world. 

With real gross national disposable income, Statistics New Zealand said New Zealand’s ability to buy good and services was flat in the December quarter. 

This was due to a decrease in net transfer flows, an increase in terms of trade and net investment income on our international investments had dipped. 

In the December quarter, export prices were up 5.3% while import prices rose 1.5% leading to an increase in the terms of trade. 

This increase means needing fewer exports to pay for a given volume of imports and residents can buy more goods and services by volume from the income generated from a given level of domestic production, according to Statistics New Zealand. 

Having a flat real gross national disposable income along with a 0.2% population increase over the December quarter led to a decreased real gross national disposable income per capita by 0.2%. 

In the year to December, real gross national disposable income increased 1.5% while real gross national disposable income per capita rose 0.9%.