When the Facts Change Is 2025 the year to thrive?
Jan 23, 2025
Sabrina Delgado, an economist at Kiwibank, joins Bernard Hickey to discuss the future of New Zealand's economy in 2025. They dive into the effects of recent interest rate cuts and the potential for economic recovery. Key topics include the real estate market dynamics, the effects of net migration, and business confidence. Sabrina also highlights the necessity of monitoring inflation and labor market trends as crucial indicators that will shape the country’s economic resilience and growth in the coming year.
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NZ Economy Outlook 2025
- The New Zealand economy faces a potential recovery in 2025, driven by interest rate cuts.
- However, this recovery is expected to be gradual and occur in two halves, with the second half showing more improvement.
Rate Cut Impact
- Despite the usual lag of 18-24 months for monetary policy effects, the impact of rate cuts is anticipated to be faster.
- This is due to many households and businesses fixing interest rates for shorter terms in anticipation of the cuts.
Housing Market and Economic Activity
- House sales volumes, a key driver of economic activity, are expected to pick up in 2025 as interest rates decrease and house prices moderately rise.
- Listings are already increasing as sellers anticipate this recovery, creating a more active housing market.