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New Zealand March Quarter GDP Data Shows Monetary Policy Easing was Working, Jarden Says

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The March quarter New Zealand gross domestic product (GDP) data showed that monetary policy easing was working, but through business investment and trade rather than the consumer, Jarden said in a note late on Thursday.

New Zealand's GDP rose 0.8% on a quarterly basis in the March quarter, but slightly below the 1% forecasted by the Reserve Bank of New Zealand (RBNZ). The December GDP was revised up to 0.5% from 0.2%, lifting annual growth to 1.5% through the year.

GDP per capita rose just 0.5% in the March quarter after a flat December quarter. The resilience in the period came from the parts of the economy that cool slowly when rates rise. Consumer confidence has partly recovered but remains significantly below the long run average, Jarden noted.

The upward revision to late-2025 activity leaves the level of output higher than the RBNZ assumed in May, the investment firm said. As a result, the negative output gap was smaller than it carried into the forecast. A narrower gap means a rate hike in July is "very likely." It also expects another rate hike in September to a terminal 3% by the end of 2027.

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