New Zealand’s economy is expected to grow by nearly 3 percent by 2027, according to the latest BusinessNZ Planning Forecast, but lingering global and domestic challenges continue to cloud the outlook.

BusinessNZ economist John Pask said the country was still feeling the effects of international instability, which could limit progress in the years ahead.

“Not just war and threats of war, but also threats to trade and the international trade rules-based order are bringing uncertainty and caution,” Pask said.

“New Zealand is a trading nation, linked to the rest of the world by key markets, supply chains and global investment flows, and vulnerable to economic shocks and international tensions. Forecasts of future growth will be heavily conditional on world events.”

Despite the risks, the report shows some promising signs at home.

“There is some good news, as statistics indicate GDP improvement, inflation is still contained, lower interest rates are reducing the pressure on businesses and households, dairy and meat prices are positive, and the Government’s moves to allow greater deductions on business purchases and address poor regulation are all positive,” Pask said.

The BusinessNZ Economic Conditions Index (ECI) for the June 2025 quarter rose to 8, up two points from the previous quarter and 12 points higher than the same period last year. An index score above zero indicates generally improving economic conditions.

Pask said the more favourable ECI reading reflected recent improvements in core indicators, but added the economy remained vulnerable to shifts in global confidence and trade flows.