Did We Survive 2025? The Economy’s Reality Check

Many predicted we’d be surviving, or even thriving, by 2025. But the shift in conversation – to bracing for 2026 – reveals the economy hasn’t met expectations.

By Susan Edmunds of RNZ

And frankly, “stay in the mix for 2026” lacks the same punch.

Liquidations are at a decade high. Unemployment is, too. so, what’s behind this persistent underperformance?

BNZ chief economist Mike Jones points to three key factors.

“Population growth was meager this year, about half the long-run average. Fewer people mean less spending and activity, making growth harder to achieve.”

The housing market remained stagnant. National house price numbers were essentially flat for the year – the third year of little to no movement. This impacts people’s willingness to spend.

“cost of living pressures didn’t ease. They actually increased, especially with significant food price hikes. This squeezed spending appetites and abilities.”

He also notes the unexpected impact of US tariffs.

“We anticipated the tariffs, but the proclamation effect, the initial shock, and the resulting confidence hit were larger than expected.”

Jones says ther was a recovery mid-year, but the tariffs created a setback – an “air pocket.”

“Official GDP numbers can be tricky. They indicated a recovery in the second quarter…”