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The Monthly Economic Review is an overview of the New Zealand economy. It includes the latest data on New Zealand’s economic growth, unemployment, inflation, merchandise trade and balance of payments figures, along with certain financial data (such as the Reserve Bank’s official cash rate). The unemployment rate, economic growth and central bank interest rates for several of our main OECD trading partners are also included. Each publication highlights a specific topic of interest. The Monthly Economic Review is produced eleven times per year.


Economic growth over the December 2016 quarter was softer than expected, at 0.4 percent, although some of the weakness is considered to be temporary. On a per capita basis, GDP per capita eased by 0.2 percent over the quarter as the population grew to a larger extent than real GDP. The services sector expanded by 0.7 percent, with the business services industry growing by 1.7 percent. Household consumption spending rose by 0.4 percent in the quarter, with spending on durable goods (such as whiteware goods) rising by 1.3 percent. On an annual average basis, the economy expanded by 3.1 percent in the 2016 calendar year.

For the 2016 calendar year, New Zealand’s current account deficit totalled $7,112 million, equivalent to 2.7 percent of gross domestic product. Within the current account, only the services balance recorded a surplus ($4,484 million), while the remaining balances were in deficit during the year. The annual current account deficit is the lowest as a percentage of GDP since the year ended in the September 2014 quarter. New Zealand’s net international investment position (the net amount of equity and debt we owe the rest of the world) was equivalent to 59.9 percent of GDP in the December 2016 quarter, at a value of $156.5 billion.

Reserve Bank Governor, Graeme Wheeler, left the official cash rate (OCR) at 1.75 percent on 23 March. He noted that headline inflation is expected to return to the midpoint of the target band (i.e. two percent) over the medium term. The Governor also said that house price inflation has moderated, although “It is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand”. The last change in the OCR occurred on 10 November 2016, when the Governor reduced the OCR by 25 basis points from two percent.

The floating first mortgage housing rate rose by seven basis points to 5.79 percent for new customers in March. The lowest fixed term mortgage rate was the one-year fixed mortgage rate at 5.02 percent in February. Fixed-term mortgage rates have been rising over the last five/six months, with the four-year and five-year fixed term rates rising by over half a percent (i.e. over 50 basis points).

QV reported that average property prices rose by 12.9 percent nationally to $631,432 in the year ended March 2017. Average prices nationwide are now 52.4 percent above the previous peak of late 2007. Average prices in the Auckland market fell by 0.2 percent over the past quarter, although prices were up 12.3 percent on a year ago to $1,045,362. Average prices in the Queenstown Lakes District were close behind, with an average property price of $1,042,258 in March 2017.

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