New Zealand’s economy expanded 1.1% quarter-on-quarter in Q3 2025 versus expectations of a 0.9% growth figure and the earlier 1.0% contraction, marking its strongest quarterly performance in over a year.
However, it’s also worth noting that the previous period’s reading saw a slight downgrade from the initially reported 0.9% contraction.
Key Takeaways
- Quarterly growth: GDP increased 1.1% in Q3 2025, the strongest expansion since early 2024
- Annual growth: The economy grew 0.5% over the year to September 2025
- Sectoral drivers: The primary sector and services industries led the recovery, while interest-rate sensitive sectors remained subdued
- Export performance: Strong commodity prices, particularly in dairy and beef, supported export earnings despite weak global demand
- Domestic demand: Household consumption and business investment showed signs of stabilization after prolonged weakness
- Policy implications: The data suggests the RBNZ’s aggressive easing cycle is beginning to gain traction
Link to official Stats NZ New Zealand GDP (Q3 2025)
While the 1.1% quarterly expansion was certainly welcome, the annual growth rate of just 0.5% underscores that New Zealand’s economy remains fragile and operating well below its potential. Besides, much of the rebound appears to have been driven by the primary sector, benefiting from elevated export commodity prices and a weaker exchange rate, rather than broad-based domestic demand recovery.
Market Reactions
New Zealand Dollar vs. Major Currencies: 5-min
Overlay of NZD vs. Major Currencies Chart by TradingView
The Kiwi underwent a volatile reaction to the release, initially rallying on upbeat headline figures, but quickly returning gains likely on profit-taking and traders scrutinizing whether or not the underlying data reflected notable improvements.
Within minutes of the post-GDP spike, NZD reversed course and weakened steadily throughout the first few hours of the Asian session. Losses ranged from 0.08% versus the Aussie to 0.23% against the Canadian dollar, as the currency sold off gradually across the board.
