New Zealand enters second recession in 18 months amid economic contraction

The economy's unexpected shrinkage prompts increased speculation on interest rate cuts, as policymakers face pressure to adjust strategies.

New Zealand's GDP contracted by 0.1% in the final quarter of 2023, marking the country's entry into its second recession within 18 months.
The Reserve Bank of New Zealand's aggressive monetary policy tightening is under scrutiny as the economy struggles to rebound.
Economists now anticipate interest rate cuts could come sooner than the previously projected mid-2025, with some expecting reductions as early as the second half of 2024.
Record migration has been a key factor propping up the economy, with 141,000 new arrivals in 2023.
Regulatory adjustments and budget cuts, including a reduction in government workforce, are expected as the government responds to the economic downturn.