IMF Warns of Delayed NZ Recovery Amid Oil Shock

The International Monetary Fund (IMF) has released its latest assessment of New Zealand's economy, predicting that the country's recovery from the COVID-19 pandemic will be delayed due to an oil shock caused by the Middle East war.

The IMF estimates that New Zealand's real GDP growth will contract in Q2 2026, but recover later in the year and average 2 percent in 2026. The organization also forecasts that inflation will remain above the Reserve Bank of New Zealand's target range of 1-3 percent through 2026.

The IMF advises the Reserve Bank to gradually withdraw monetary accommodation towards a neutral stance by the end of 2026, while maintaining a positive assessment of bank capital, liquidity, and profitability.