Reserve Bank delivers vicious consumer-led recession


New Zealand’s economy fell into a ‘technical recession’ in the March quarter after aggregate real GDP fell 0.7% in the December quarter of 2022, followed by another 0.1% decline in the March quarter.

Net overseas migration and population growth are soaring, which has driven per capita GDP deep into the red.

New Zealand population growth

Real per capita GDP tanked by 1.1% in the December quarter and by another 0.7% over the March quarter (see red bars below):

New Zealand per capita GDP growth

New Zealand’s per capita real gross national disposable income (NDI) also plunged by 2.2% and 0.9% respectively over the December and March quarters:


The Reserve Bank’s 5.25% of interest rate hikes continues to lift average mortgage rates as borrowers roll off fixed rates onto higher variable interest rates:

Yield on mortgage lending

This rising repayment burden is weighing heavily on consumer spending, which has driven the descent into recession.


On Thursday, Statistics New Zealand released data on retail sales volumes, which fell by by 1.0% in the June 2023 quarter, which follows falls of 1.6% and 1.1% in the March 2023 and December 2022 quarters respectively:

Retail sales volumes

Given New Zealand’s population increased by 2.1% in the year to June 2023, this means that retail spending per capita is plunging.


New Zealand households are facing a multi-year recession in per capita terms, alongside falling living standards.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.