“Unemployment is forecast to remain elevated until the end of 2025 and isn’t expected to fall back to its pre-recession lows within the forecast period. Without a plan to reduce it, we are choosing a permanently higher unemployment rate in New Zealand. It’s no wonder so many Kiwis are emigrating overseas,” said NZCTU Te Kauae Kaimahi Economist Craig Renney.
Today’s announcement by the Reserve Bank shows that the economy will remain weak going into 2025, and that unemployment will continue to climb, said Renney. “The forecasts show that employment is likely to remain below 2023 levels until December 2025 – while the labour force grows by 28,000 during that period. Over the past year economic growth was effectively zero.”
“Business investment won’t hit 2023 levels until 2027. Residential investment is still falling. Government spending falls and returns to its current level in 2026. There is no engine of economic growth except private spending, which is weak.”
“Many people will celebrate the fall in interest rates, and the hope that this will bring financial relief. But this data also shows that the labour market is in for the long-haul. Yet there is no plan to help towns like Tokoroa or Timaru deal with the closure of large employers. It’s time for a different track.” Renny said.
