New Zealand’s economy has received a ranking of 33rd out of 37 in an international comparison conducted by The Economist, assessing the performance of OECD economies for 2024.
This ranking places New Zealand just ahead of Finland, Latvia, Turkey, and Estonia.
The rankings were based on several critical indicators, including GDP growth, stock market performance, core inflation, unemployment rates, and government deficits.
The top performers in the OECD included Spain, Ireland, Denmark, Greece, and Italy.
New Zealand’s Post-COVID Economic Hangover
Gareth Kiernan, chief forecaster at Infometrics, noted that New Zealand is experiencing the aftermath of its “Covid spend-up party.”
“I suspect if you looked at some of our metrics in previous years, we would have been near the top of the list because we had been boosting the economy so much with very stimulatory monetary and fiscal policy.
“There’s likely to be some improvement in some of the metrics they’ve used in 2025—GDP, inflation, and to a lesser extent, unemployment—but it’s going to be a slow road towards improvement for the fiscal position, in particular, reflecting some of the structural issues such as weak productivity growth that continue to hamper our medium-term progress.”
Aggressive Monetary Policy
Mary Jo Vergara from Kiwibank highlighted that the Reserve Bank of New Zealand’s aggressive interest rate hikes have contributed to economic faltering. In contrast, countries like the United States have managed to achieve a “soft landing” economically.
“The US, by contrast, has orchestrated and achieved a soft landing. Here, per capita output has been in decline since December 2022, and firms are now downsizing. We’re expecting unemployment to continue climbing in 2025, whereas job growth in Australia, while slowing, remains positive,” Vergara said.
Meanwhile, Massey University professor Faruk Balli expressed that he was not surprised by New Zealand’s ranking.
For Balli, “New Zealand is not experiencing rapid growth, and the recent policies from the Reserve Bank, along with the challenges of the post-COVID era, are making recovery more difficult.”
He pointed out that New Zealand, which held the position of third in the world for GDP per capita during the 1950s, has now fallen to 37th.
Balli emphasised that “this simply states New Zealand is growing significantly slower compared to other OECD countries in the last 60 years. New Zealand is an island country, mostly isolated, and we cannot compare it with other countries in Europe easy to access to capital; easy to trade. We can also see the same issue for Australia.”