Weekly Commentary

The New Zealand economy is quite volatile compared to others in the OECD. This is partly because New Zealand is small and has a fairly narrow basket of exports. But another contributor is New Zealand’s wildly varying net immigration rate, which has caused population growth to range from 0.5% to 2.0% over the past twenty years. What’s more, net immigration tends to move in the same direction as other drivers of the economy, thus rendering economic cycles larger than they would otherwise be.