NEW ZEALAND FINANCE MINISTER: TREASURY FORECASTS REAL GDP GROWTH AT 0.8% IN 2025-26 UNDER WORST CASE IRAN WAR SCENARIO

New Zealand’s Finance Minister disclosed that Treasury’s worst-case scenario for a prolonged Iran conflict forecasts real GDP growth slowing to 0.8% in 2025–26, reflecting significant downside risks from global spillovers. The transmission mechanism centers on elevated oil prices and disrupted shipping routes, which would tighten global supply chains and dampen trade-dependent economies like New Zealand’s through higher input costs and weaker export demand. This scenario particularly pressures growth-sensitive assets, including the New Zealand dollar and domestic equities, while boosting safe-haven demand for bonds and gold. Traders will closely monitor the next Global Dairy Trade auction and New Zealand’s Q1 inflation data as near-term indicators of domestic resilience amid external shocks.

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