New Zealand's Economy Stronger Than Expected in 2Q

By James Glynn

SYDNEY--New Zealand's economy grew by a little more than expected in the second quarter, with activity proving resilient despite ongoing global shocks and rising energy costs.

New Zealand's gross domestic product rose 0.2% in the quarter, following a 0.9% expansion in the first quarter, Stats NZ said Thursday. Economists expected a 0.1% expansion in the quarter.

The economy grew by 2.6% in the second quarter from a year ago.

"The New Zealand economy has largely held its ground through the U.S.-Iran conflict, though it hasn't been completely unscathed," Michael Gordon, senior economist at Westpac, said.

Nine of the 16 major industries measured by the data reported growth over the quarter, the data showed.

The pace of the expansion, while less than the first quarter, was still more than what was forecast by the Reserve Bank of New Zealand at a recent policy meeting, keeping the door open to further interest-rate increases.

The RBNZ has raised interest rates twice this year and indicated that further policy tightening is likely.

The economy is likely to face further headwinds in coming quarters as central banks boost rates to cool inflation and the war in the Middle East remains unresolved.

Construction was the largest upward contributor to the overall increase in growth, up 2.7% in the quarter. This was the largest increase in construction activity since the mid-2023, the data showed.

Public administration and safety also contributed to the increase in growth.

The largest downward contributors were transport, postal, and warehousing, and retail trade and accommodation, according to the report.

The expenditure measure of GDP rose 0.4% in the second quarter, following a 1.1% increase in the first quarter.

Export volumes rose 3.3% in the quarter with U.S. demand for beef contributing significantly, the data showed.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

September 16, 2026 19:33 ET (23:33 GMT)