Cautiously optimistic: New Zealand is past the worst, but has a slow climb ahead

The New Zealand economy is gradually improving, helped by strong migration and increased consumer spending, according to the ASB Quarterly Economic Forecast.

However, the bank has warned that inflation is likely to remain above the government's target of 1% to 3% until at least 2023, and that interest rates look set to remain steady until at least 2025, which will continue to place pressure on homeowners.

The housing market has been the first to reflect the improving economy, with house prices rising over the past six months, aided by increased demand due to steady migration.

In addition, business confidence has improved due to the change in government and more business-friendly policies.

Nevertheless, the global economic outlook remains subdued, with China's continued recovery from COVID-19 constraining the tourism sector and lowering commodity prices.