2025 was a year when interest rates kept on falling as policy makers strove to normalise their balance sheets. Inflation was claimed to under control - except it was a mirage. Inflation got new impetus from some crazy US actions and that reverberated around the world. Equity markets drank the Trump Cool-aid, and bond markets sipped it for a while, But as the year has ended the bond market decided the addiction wasn't going to healthy. Yields have started to rise, all preceded by an unseemly dash for precious metals in the hope they might provide some value protection. Certainly, crypto couldn't supply any.
Juicing all this financial market fear is a 79 year old grifter in full retribution mode, essentially an autocrat with an alcoholic personality.
The problem for 2026 is it might all get worse. Just because 2025 didn't end in tears is no protection that 2026 wont. And financial markets are getting the sense that US inflation and the US budget deficit will get very much worse at the same time, ushering in a serious bout of global stagflation.
New Zealand might look like it is coming out of its 2025 recession, but social pressures have bult up. An unstable global situation is unlikely to be helpful in getting the benefits of 'growth' more broadly shared.
And there will be climate stress. That too will cause local impacts. Would you invest in petrol stations?, buy on a flood plain? or near coastal lowlands? If you do, will you expect society to bail you out if things go pear-shaped? Should insurers be required to cover those risks and spread the costs over everyone else? Should banks lend when those risks seem obvious?
Will we tolerate un-priced risk any more? Can we resist the socialising of losses? We may have to when public budgets are in growing deficit. The HYFEU pushed out the deficit track as fast as time is elapsing.
On top of all this, it's election year in 2026. One of the most interesting developments of 2025 was that one major party indicated it would bring in a capital gains tax - and almost no-one objected. It probably helps that there are no capital gains in the current residential housing market, so that blunts the NIMBY impulses
Anyway, there is a lot to talk about.
How do you think our economy (housing, agriculture, tourism, education, to name the key sectors in decreasing size) will fare in 2026?
And don't forget those climate predictions. Pretend you are an insurer (or a lender).
Who will be the winners in 2026? The losers?
It is time to test your prediction skills and bravely record them here in the Comment stream below. (Sign up here.)
And of course there is the small matter of bragging rights on your 2025 predictions. How good were they? Here is a quick link to last year's set. More than 200 of you weighed in again last year. More than 15,000 readers watched that particular debate.
This article is to encourage you to record your 2026 predictions.
Your predictions can be on any topic that has an impact on the New Zealand economy: anything, including property, interest rates, exchange rates, the RBNZ (is the new governor a Willis-patsy, or has genuine inflation-fighting skills?), insurance, rural issues, the dairy payout, our migration issues, our relationship with China, the big international economic influences, even the shifting international power balance, and the like. But please try to ground them in the economy. (For example fashion, sporting or celebrity comments are not relevant, but climate change issues certainly are.)
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Grab a wine or a beer. Settle in. Over to you.
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