Migration, tourism cooling in NZ
Annual net migration dropped sharply to below 50,000 in September, the lowest since January 2023, according to the latest Stats NZ figures. ASB Bank economists forecast a potential further decline to 30,000 by year-end and a likely shift toward net outflows in 2025.
September’s seasonally adjusted net inflow was only 2,310, bringing the recent three-month average down to a two-year low.
“There is still the risk that net inflows continue to decline and net PLT outflows become more of the norm for 2025,” said Nick Tuffley (pictured above), ASB’s chief economist.
Increased departures of New Zealand Citizens
The past year has seen high departure rates among New Zealand citizens, with nearly 80,000 leaving the country – close to record levels. Taking returning citizens into account, the net outflow was around 54,700.
“Strong outflows of NZ citizens remained evident as Kiwis seek greener pastures offshore,” Tuffley said.
Although non-NZ citizens have continued to arrive, net inflows have cooled to just under 100,000, largely due to a challenging job market and economic concerns.
Migration arrivals from India, China, and the Philippines remain the highest, though work and student visas are on the decline, reflecting slower labor demand and looser employment conditions.
Tourism stagnates below pre-COVID levels
Tourism data also suggests a plateau, with annual visitor numbers holding at around 3.2 million – well below the pre-COVID peak of 4 million.
Q3 visitor arrivals rose modestly by 4%, with Australians making up more than 40% of all tourists.
Arrivals from China remain far below pre-pandemic levels, outpaced by those from the United States.
Despite the October increase in the New Zealand international visitor levy, Tuffley believes, “October increases in the NZ international visitor levy are unlikely to significantly impact visitor numbers.”
Economic and policy implications
The ongoing reduction in migration and tourism flows has notable economic effects, with slower growth anticipated in housing demand, domestic spending, and labour capacity.
This trend aligns with ASB’s expectation of further monetary easing by the Reserve Bank (RBNZ).
ASB projects another 50-basis-point cut in November, bringing the OCR down to 3.25%, though future policy changes remain highly dependent on economic conditions.
“Easing economic support from net immigration and tourism inflows will weigh on economic growth and translate into greater spare capacity,” Tuffley said.
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