NZ Economic Update: Rates, Rents, Trade & Market Insights – March 22, 2026

Novel Zealand’s merchandise trade deficit widened sharply in February, driven by a surge in imports and only modest growth in exports, according to Statistics New Zealand. The deficit reached $257 million for the month, a significant shift from the $445 million surplus recorded in February 2025.

The increase in imports, up 11.8% year-on-year, outpaced the 0.4% rise in exports. Trade deficits with key partners Australia, Japan, and Korea worsened considerably compared to the same period last year. While a surplus with the United States was maintained, the surplus with China was halved. These five countries collectively account for nearly 60% of New Zealand’s total exports, highlighting the broad-based nature of the deterioration.

The weakening trade position comes as the global economic outlook remains uncertain. The BNZ reported that job advertisements continue to trend higher, albeit from a low base, suggesting a gradual recovery in the labour market. The number of job ads for the three months to February was 3.9% higher than the previous three-month period.

On the domestic front, credit card billings showed a slight softening in February, rising 2.1% year-on-year. However, this increase is largely attributable to inflation, with real billings likely easing. Notably, approximately half of credit card balances are paid off in full each month, near a series low, indicating consumers are not relying heavily on expensive debt facilities.

In the agricultural sector, tractor registrations fell 13% in February to 130 units, the lowest level for that month since 2010. This suggests farmers, despite potentially strong earnings, are holding back on capital investment.

Financial markets reflected ongoing uncertainty. The New Zealand dollar strengthened against the US dollar, reaching just over 58.8 US cents, and also gained ground against the Australian dollar, reaching 83 Australian cents. Wholesale swap rates are expected to rise, while the 10-year New Zealand government bond yield increased by 2 basis points to 4.74%. A recent $450 million New Zealand Government bond tender attracted strong demand, with the May 2041 long bond proving particularly popular, achieving a yield of 5.01%, the highest since May 2025.

Equity markets continued their downward trend, with the NZX50 index down 0.5% as of 3pm Friday, heading for a 1.5% weekly decline. F&P Healthcare, a market heavyweight, contributed to the losses, falling another 1.7%.

Global commodity prices also saw movement. American oil prices fell by $6 to just under $93 per barrel, while international Brent crude dropped $4.50 to just under $106 per barrel. The price of carbon on the secondary market decreased by $2.50 to $39 per NZU. Gold prices also declined, falling $170 to $4676 per ounce.

Bitcoin continued its recent volatility, dropping 1.0% to US$70,353.