Navigating Economic Challenges: Westpac’s Insights for 2024


Westpac NZ has released its economic overview for 2024, highlighting the anticipated challenges facing the government and the economy in the coming year. From fiscal policy to monetary measures, the report offers insights into the factors shaping New Zealand’s economic landscape.

Navigating Economic Challenges: Westpac's Insights for 2024

Monetary Policy Outlook:
Westpac’s chief economist, Kelly Eckhold, expects the Reserve Bank to maintain its current monetary policy stance, keeping interest rates steady in the absence of significant inflationary pressures. However, the possibility of rate hikes looms if economic conditions fail to adjust as expected.

Fiscal Tightening Ahead:
Eckhold emphasizes the need for fiscal tightening to address the country’s structural fiscal deficit, estimated at 4 percent of GDP. With loose fiscal policy contributing to economic pressures, the government faces the challenge of balancing growth with deficit reduction while meeting increasing demands for public services.

Economic Growth Projections:
Westpac forecasts sluggish economic growth of just 0.7 percent for the year, with per-capita terms reflecting negative growth. Rising unemployment and slowing wage growth are expected as businesses and households adopt a cautious approach amidst economic uncertainties.

External Risks and Geopolitical Uncertainty:
The report underscores the elevated geopolitical risks and weak external economic environment, which pose challenges for New Zealand businesses. Uncertainties in the global landscape highlight the need for resilience and adaptability in navigating economic headwinds.

Agricultural Sector Resilience:
Despite external challenges, the agriculture sector presents a bright spot, with improved conditions leading to stronger outlooks for dairy, forestry, and horticulture. Westpac anticipates notable improvements in prices, particularly in the dairy market, with the farmgate milk price projected to rise in the coming season.

Housing Market Dynamics:
The residential property market is expected to benefit from robust population growth and upcoming changes in investor tax rules. Westpac forecasts continued growth in house prices, outpacing inflation, fueled by strong migration trends and limited housing supply.

Challenges and Opportunities Ahead:
As New Zealand navigates the economic challenges of 2024, Westpac emphasizes the importance of tight monetary and fiscal policies to facilitate economic rebalancing and inflation reduction. The outlook hinges on the pace of migration trends and the labor market’s ability to absorb increased supply, underscoring the need for proactive policy measures and adaptive strategies.


With economic uncertainties on the horizon, Westpac’s economic overview provides valuable insights into the challenges and opportunities facing New Zealand in 2024. By addressing fiscal deficits, harnessing agricultural resilience, and managing housing market dynamics, policymakers and businesses can work towards sustainable growth and stability in the face of evolving global dynamics.

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