You might want to give your nearest farmer a hug, because it’s the primary sector that is leading New Zealand’s slow but steady economic recovery. We were warned that the first half of 2025 would be hard going, and that’s certainly proven true. But now the economy finally seems to have warmed up, with some promising indicators of better times ahead.
The most impressive number is our $1.4bn trade surplus – it’s fantastic to see our hard-working farmers and growers get rewarded for all their efforts. The primary sector is doing the heavy lifting at a time when it’s really needed.
There were other positive indicators in May, too, including:
the business Investment Boost in the Budget
another 25bp OCR cut, with more likely to come
higher retail activity in the March quarter, right across the country
slightly lower unemployment than was expected
slightly higher GDP growth in Q4 than was expected, exiting technical recession
higher consumer confidence in April
Yes, job seekers are still struggling, and house values remain well below their late-2021 peak. And of course nobody can predict what Trump will do, creating uncertainty for global markets. Overall, though, there are plenty of reasons to feel optimistic.
We’re certainly feeling optimistic here at Zagga. The number of loan applications is rising, and more of our borrowers’ projects are kicking off.
Our investor base is growing as investors look around for alternatives to term deposits; with the lower OCR and high levels of funding around at competitive rates to borrowers, returns have come down a bit, but are still looking strong and steady against term deposits and other investments.
For borrowers, we’ve also been able to capitalise on our speed of processing new loans. For those looking to settle loans quickly, Zagga’s speed and agility has been a huge strength – we can have loans approved and funded in days, rather than several weeks. We’re also continually working to be one of the most competitive non-bank lenders around.
It looks like the second half of 2025 is going to keep bringing gradual improvements, and we’re looking forward to the momentum continuing to build.