Can New Zealand’s recovery survive the global oil shock?
Mar 18th 2026
New Zealand is showing early signs of economic recovery after a pandemic slump, but higher oil prices and the Middle East conflict threaten growth and could complicate cost of living and election debates in November.
- Westpac forecasts New Zealand grew 1.6% in 2025 and will accelerate to 2.8% in 2026, edging ahead of Australia in some projections.
- The Middle East war has pushed oil prices higher and lifted petrol by about 45 to 50 cents per litre, increasing cost of living pressure.
- Strong export demand for meat and dairy and a post pandemic tourism rebound are supporting the recovery.
- Recent interest rate cuts have lowered fixed mortgage rates and could boost household spending.
- Unemployment is at its highest level in a decade even as job adverts and workforce participation have started to rise.
- New Zealand’s small, trade dependent economy is more exposed to global shocks and could see growth pause if energy and trade disruptions persist.
Articles
- Will South Korea’s epic bull market survive the energy shock? www.economist.com
- China cannot escape the energy shock www.economist.com
- Isolated and exposed: can New Zealand’s fragile economic recovery withstand the global oil shock? www.theguardian.com
- New Zealand prepares covid-like alert system for possible fuel restrictions as oil prices soar www.rnz.co.nz
- China is a serious contender in the race for fusion energy www.economist.com