When interest rates are not already close to zero, cuts in policy rates eventually help to prop up the property market. Chart 1: Economic Growth Rates (Source: IMF)Things do not look good for Luxon here. Chart 2: Unemployment Rates (Source: IMF)Again, New Zealand was a relatively strong performer until 2023 but has underperformed since. The recent self-inflicted weakness of the New Zealand economy has certainly helped drive the Official Cash Rate back down. There is no reason to see the level of New Zealand government debt as a source of economic risk.

Source: Stuff March 04, 2026 21:01 UTC