New Zealand GDP Grows 0.2% in Q2 as Middle East Crisis Weighs

New Zealand's economy expanded by 0.2% in the June 2026 quarter, a slower pace than earlier in the recovery, as the conflict in the Middle East dampened activity. The figure, released by Statistics New Zealand on Thursday, came in above analyst expectations of 0.1% growth and the Reserve Bank of New Zealand's projection of no change.

On an annual basis, gross domestic product rose 2.6%, surpassing market forecasts of 2.2%.

"The 0.2 percent growth in economic activity in the June 2026 quarter reflects mixed results, with increases in nine out of 16 industries," Statistics New Zealand spokesperson Jason Attewell said.

Construction was the largest upward contributor, growing 2.7% over the quarter. The main drags on growth came from transport, postal and warehousing.

The economy had been showing signs of recovery after a prolonged soft patch, but the U.S.-Israeli war with Iran pushed up oil prices and heightened uncertainty, weighing on momentum in the second quarter.

The central bank has said it expects the recovery to strengthen and broaden. Earlier this month it raised the official cash rate by 25 basis points to 2.75%, its second consecutive increase, as inflation remained above its target range.

With no clear winner emerging ahead of the November 7 general election, the economy has become a central campaign issue. The ruling coalition, elected three years ago on a promise to revive growth, faces an opposition Labour Party focused on easing cost-of-living pressures for middle-income households.