New Zealand's economic outlook is showing signs of potential recovery, particularly in the agricultural sector. Recent reports indicate that commodity export prices have risen for a third consecutive month, driven by a weaker local currency and recovering global demand for dairy products [a1fc7122]. Prices in New Zealand dollars increased by 3.1% in October compared to September, although dairy prices remain 17% lower than the previous year despite a 5.9% increase from September [a1fc7122]. This situation has raised concerns about the impact of lower export prices on the economy, especially in the primary sector, where rising mortgage payments are expected to have a significant effect [1ce84744].
In a contrasting view, Roger J Kerr offers an optimistic perspective on New Zealand's economic outlook for 2025. He notes that mainstream forecasts predict a continued recession and a weak Kiwi dollar below 0.6000, but recent agricultural export prices have seen significant increases, with lamb prices rising from below $90 to above $120 per head and milk prices exceeding $10.00/kg [a4b21556]. Kerr estimates a $4 billion boost to rural incomes from these milk price increases, alongside a remarkable 314% surge in fruit exports in October 2024 [a4b21556]. Positive developments in global demand and reduced supply from competitors are driving this recovery, leading to a projected GDP growth of 2.00% for 2025, which surpasses consensus forecasts [a4b21556].
Despite the current challenges, including inflation and rising farm input costs, the depreciation of the New Zealand dollar has partially offset the impact on exporters' revenue [1ce84744]. The outlook for the Kiwi dollar may improve as New Zealand's economic conditions strengthen, potentially leading to a rise in the NZD/AUD exchange rate [a4b21556]. Historical trends suggest that dips in the NZD/USD below 0.9000 are temporary, indicating a resilient currency in the long term [a4b21556].
Overall, while immediate concerns about lower export prices and their impact on the economy persist, the potential for a recovery driven by agricultural exports and positive global demand could reshape New Zealand's economic landscape by 2025 [a4b21556].