National's Economic Prospects Darken Amid Treasury Warning Signs
New Zealand's Treasury has released its Pre-election Economic and Fiscal Update (PREFU 2026), projecting a brighter picture of the government's finances in the short term. However, this update comes with a warning sign that the economy under National's management may lead to misery for most.
The PREFU 2026 expects the economy to grow at an average of 2.6% over the forecast period, while unemployment is projected to trend down from its peak of 5.6% this year to eventually reach 4.3%. However, officials caveated all their numbers, noting 'considerable uncertainty' and risks skewed towards weaker growth and higher inflation.
The main uncertainty in the near term was the persistence of the oil price shock arising from the Middle East conflict. Officials also noted that oil prices and interest rate expectations have increased since their forecasts were finalized.