ASB Sees NZ Economy Roaring Back with Q2 Growth Surprise
New Zealand's economy is expected to show stronger-than-expected growth in the second quarter, according to ASB Bank. The bank forecasts a 0.3% increase in production GDP for June, translating to an annual growth rate of 2.4%. This would be the strongest annual growth since June 2023.
ASB's economist Wesley Tanuvasa notes that this partly reflects the sharp contraction in June 2025 dropping out of the annual calculation. The bank has upgraded its forecast from a 0.1% contraction, citing stronger-than-expected data releases in recent weeks.
The recovery is not evenly spread, with primary and goods-producing sectors leading growth due to robust dairy prices, expanding forestry exports, and a construction sector finding firmer footing. Manufacturing is also expected to extend its expansion, aided by strong trade data and improving business conditions.
However, services are forecast to grow just 0.5%, dragged down by weaker discretionary spending. ASB expects household spending to have declined over the quarter, consistent with typical consumer behavior during a fuel price shock.