Fortnightly Economic Update – 12 March 2026
Global markets have reacted sharply to the outbreak of conflict in the Middle East, with oil supply disruptions driving higher energy prices and increasing uncertainty around growth and inflation.
Prior to the conflict, high-frequency indicators pointed to a strengthening recovery in the New Zealand economy, although activity data remained mixed ahead of the December quarter GDP release.
Rising oil prices are expected to lift inflation temporarily and weigh modestly on global growth, with central banks facing a difficult balance between these opposing pressures.
Domestically, the recovery remains intact but vulnerable, with higher fuel costs likely to dampen consumption and slow momentum if elevated prices persist.
Fortnightly Economic Update – 26 March 2026
The New Zealand economy is beginning to absorb the early impacts of the Middle East conflict, with higher oil prices feeding through to inflation, financial conditions and household costs.
GDP growth was modest in the December 2025 quarter, though underlying data prior to the conflict indicated improving momentum supported by stronger spending, migration and tourism.
Globally, the OECD has warned that sustained energy price increases will test economic resilience, with risks of weaker growth, tighter financial conditions and reduced consumer and business activity.
While the recovery continues, heightened uncertainty and rising costs are expected to weigh on demand, with the pace of growth through 2026 likely to depend on the duration and severity of the conflict.
© The Treasury - New Zealand