However, sluggish productivity, a weaker tax take, and rising government spending have delayed a return to budget surplus and increased borrowing needs.
Stephen Hickson, an economist at the University of Canterbury, highlights the tension between balancing public spending and supporting economic recovery. He notes that reduced government spending will likely dampen growth further, affecting households and businesses.
Globally, challenges such as Donald Trump’s return as US president and ongoing Middle East instability may impact New Zealand’s exporters and economic stability.
Despite these hurdles, improving inflation and easing mortgage rates suggest brighter prospects. However, pressing issues like the housing market, labour shortages, and infrastructure will require focused investment to sustain recovery.
Read the full article on The Conversation.
Disclosure statement
Stephen Hickson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
