As of January 2025, New Zealand's economy is navigating a period of cautious optimism following recent challenges. In the third quarter of 2024, the country experienced a technical recession, leading to a record high in departures, with 127,800 people leaving in the 12 months through November 2024—a 28% increase from the previous year. Over half of these were New Zealand citizens, a trend attributed to limited domestic work opportunities and more favourable prospects abroad, particularly in Australia. Despite this, inward migration has offset these losses, resulting in a net migration gain of 30,600 during the same period.
In response to the economic downturn, the Reserve Bank of New Zealand has implemented monetary easing, cutting the official cash rate by 125 basis points since August 2024. This move aims to stimulate economic activity by reducing borrowing costs for consumers and businesses. The Treasury's Half Year Economic and Fiscal Update (HYEFU) forecasts indicate an economic recovery, with growth strengthening over the next year and unemployment declining from mid-2025.
To attract foreign investment and bolster economic growth, Prime Minister Christopher Luxon announced plans to relax rules governing foreign investment. The government will establish Invest New Zealand, an agency modelled after successful initiatives in Ireland and Singapore, to streamline the investment process and offer tailored support to foreign investors. The initiative aims to boost capital investment in sectors such as banking, fintech, transport, energy, and manufacturing.
In South Auckland, local businesses are showing resilience and adaptability amid these economic shifts. A vibrant new market in Manukau is providing local Māori and Pacific entrepreneurs with a fee-free platform to showcase their products, complete with space, equipment, and power. This initiative not only supports small businesses but also fosters community engagement and cultural expression.
Additionally, the opening of Mānawa Bay, an outlet shopping centre near Auckland Airport, in September 2024, has introduced over 100 stores, mainly outlets and restaurants, to the area. This development is expected to stimulate the local economy by creating jobs and attracting shoppers from across the region.
While challenges persist, these developments reflect a proactive approach to economic recovery, with both government initiatives and community efforts contributing to a more optimistic outlook for 2025.
