PM Edition: Here are the top 10 economics articles on LiveNews.co.nz for March 25, 2026 – Full Text
Economy – 1970s-style stagflation could hit global economy: deVere CEO
March 25, 2026
March 25 2026 – Households, businesses and investors should prepare for 1970’s-style global stagflation, warns the CEO of one of the world’s largest independent financial advisory organisations.
Nigel Green of deVere Group is speaking out after private sector output in the euro zone sank to a 10-month low in March, amid mounting evidence of the impact the Iran conflict is having on the global economy.
He says: “The figures show the severe impact the Iran war is already having on the euro zone economy.
“But, like in the 1970s, stagflation could become a widespread global phenomenon characterised by high inflation, low growth, and high unemployment, heavily driven by oil price shocks.
“Back then it hit most developed economies, including the US, Canada, Western Europe, and Japan, largely ending the post-war economic expansion, and it looks like a spectre that may be looming once again.”
Recent flash PMI data underscores the shift. Euro zone business activity has slowed sharply, with the headline index hovering just above the contraction threshold at 50.5, down from 51.9 the previous month.
Cost pressures are accelerating at the fastest pace in more than three years as energy prices surge and supply chains tighten.
“Oil and gas prices are feeding directly into production costs, transport, and ultimately consumer prices. At the same time, demand is weakening.
“This combination is toxic. Growth is fading just as inflation is being reignited. Central banks have very limited room to respond effectively,” explains the deVere CEO.
Energy markets have tightened rapidly since the escalation of tensions involving Iran, with crude prices pushing higher and shipping disruptions adding further strain.
“Europe and Asia remain particularly exposed due to its reliance on imported energy, leaving businesses vulnerable to sustained price volatility.”
He continues: “Investors need to recognise that traditional assumptions are breaking down. Bonds may not offer the same protection if inflation remains elevated. Equities face margin pressure as input costs rise and consumers pull back.
“Cash loses value in real terms in an inflationary environment. Standing still is not a strategy.”
The European Central Bank has already signalled weaker growth expectations for 2026, projecting sub-1% expansion, while inflation forecasts risk drifting higher if energy prices remain elevated.
Surveys indicate declining business confidence and softer hiring intentions, reinforcing concerns that the slowdown is gaining traction.
“Preparation is essential. Portfolios must be structured for resilience, not optimism. Investors should be increasing exposure to assets that historically perform in inflationary periods, including commodities, energy producers, and selective real assets.
“In terms of equities, the focus must shift to sectors with pricing power and strong balance sheets. Companies able to pass on higher costs without destroying demand will outperform.”
Currency markets are also likely to reflect the divergence in economic performance and policy responses.
Risk-sensitive currencies could come under pressure, while volatility across foreign exchange markets is expected to increase.
Nigel Green comments: “Diversification across currencies, geographies, asset classes and sectors becomes more important in this environment. Overconcentration in any single one increases vulnerability.”
Geopolitical risk now sits at the centre of the economic outlook. Prolonged conflict in the Middle East would sustain pressure on energy markets, while any escalation could trigger further supply disruptions.
Duration matters. A short-lived shock is manageable. A prolonged period of elevated energy prices changes the entire economic trajectory.
Policy makers are already facing difficult trade-offs. Raising rates to control inflation risks deepening the slowdown. Cutting rates to support growth risks fuelling further inflation. “Clearly, neither path is straightforward,” notes the CEO.
Nigel Green concludes: “Complacency is the biggest risk. Stagflation is not a theoretical scenario; the early signals are already visible in the data.
“Investors who act decisively, diversify intelligently, and prioritise real returns over nominal gains will be best positioned to protect and grow wealth in the period ahead.”
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $14bn under advisement.
LiveNews: https://livenews.co.nz/2026/03/25/economy-1970s-style-stagflation-could-hit-global-economy-devere-ceo/
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Economy – Why New Zealanders still feel squeezed despite lower inflation – RBNZ
March 25, 2026
25 March 2026 – Reserve Bank Chief Economist Paul Conway delivers a keynote speech at the National Financial Advisers Conference 2026 in Auckland, with this year’s focus titled “Purchasing power and the real cost of living in New Zealand.”
In the speech, Mr Conway says New Zealand’s cost-of-living challenge is ultimately about purchasing power – what people can buy with their incomes – not just how high prices are.
He said the inflation surge during and after the pandemic pushed prices sharply higher. While inflation has since eased from the highs of the pandemic, many people are still asking why things feel so expensive. Conflict in the Middle East has added a fresh layer of disruption and uncertainty for Kiwis.
“The cost of living isn’t just about inflation or the price level – it’s about purchasing power,” Mr Conway said. “Even though inflation has fallen from its highs, prices are now much higher than they were before the pandemic.”
Mr Conway said prices in New Zealand are high by international standards. Overall prices here are above the OECD average, and prices for some products – including construction and housing-related services – are among the most expensive in the OECD.
Since the start of the pandemic, overall prices have risen by around 26 percent, while wages have increased by around 32 percent, leaving real wages modestly above pre-COVID levels. People who changed jobs were more likely to get pay increases.
Mr Conway said New Zealanders’ purchasing power – what incomes can buy – is, at best, average compared to the rest of the OECD and below average compared to the 30 higher-income OECD economies New Zealand often compares itself with.
Mr Conway highlighted the critical role monetary policy plays in improving purchasing power. High inflation creates uncertainty and distorts economic decisions. By delivering low and stable inflation over the medium term, monetary policy creates the conditions for sustained improvements in purchasing power.
“Low and stable inflation is critical, but it’s not the whole story,” Mr Conway said. “Monetary policy can anchor prices, but it can’t make New Zealand more affordable by itself. Lasting gains in purchasing power ultimately depend on productivity improvements, which allow wages to rise without pushing prices higher.”
“Productivity growth is the most powerful driver of higher real wages and improved living standards in the long run,” Mr Conway said. “Before the pandemic, purchasing power improved because of better terms of trade and a higher share of the population in work. But lasting improvements in the cost of living require stronger productivity growth.”
Mr Conway said that over recent decades, New Zealand’s productivity performance has lagged that of other advanced economies. Structural policies that support competition, investment, innovation, and international connection are critical in lifting productivity and real incomes over time. Structural policy settings also shape how resilient the economy is to shocks.
He added that stronger productivity growth raises the economy’s speed limit – allowing faster growth without inflation. A more resilient and adaptable economy would be less volatile and reduce the extent to which interest rates need to move to offset shocks and maintain price stability.
Mr Conway concluded that, while monetary policy plays a critical role by delivering low and stable inflation, lasting gains in living standards require structural changes that foster productivity growth. To sustain living standards, structural policy settings must continuously evolve to encourage competition, innovation, investment, technology adoption, and global engagement. That is the structural foundation for lowering the cost of living in New Zealand.
More information
Download the speech – Purchasing power and the real cost of living in New Zealand: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=673e8118f1&e=f3c68946f8
LiveNews: https://enz.mil-osi.com/2026/03/24/economy-why-new-zealanders-still-feel-squeezed-despite-lower-inflation-rbnz/
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Economy Positions – Recruitment for Assistant Governor, Financial Stability underway
March 25, 2026
25 March 2026 – The Reserve Bank of New Zealand – Te Pūtea Matua has commenced recruitment for the role of Assistant Governor Financial Stability.
This is one of the most senior and visible leadership roles within the RBNZ and involves matters central to New Zealand’s financial system stability.
Financial stability leadership and RBNZ’s financial stability functions continue without disruption while recruitment is underway. Angus McGregor will continue as Acting Assistant Governor Financial Stability and Stan Christian will continue as Acting Director Prudential Supervision.
Interest in the role internally, domestically and internationally is expected. RBNZ has engaged executive search firm Hobson Leavy for the recruitment process and appointment.
A further update will be released once the recruitment process is complete. An appointment is expected to be announced in June 2026.
Candidates for the role can apply here: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=b495904a68&e=f3c68946f8
LiveNews: https://enz.mil-osi.com/2026/03/25/economy-positions-recruitment-for-assistant-governor-financial-stability-underway/
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New Zealand is expensive, Reserve Bank economist says – here’s what we can do about it
March 25, 2026
Source: Radio New Zealand
RNZ / Quin Tauetau
New Zealand is an expensive country, Reserve Bank chief economist Paul Conway says, with many products priced well above the OECD average.
And some things – such as construction services, household utilities and some food items – are among the most expensive in the OECD.
Conway spoke to the National Financial Advisers Conference in Auckland on Wednesday.
He said inflation had been one of the most obvious economic disruptions over the past few years, particularly over the pandemic, when demand combined with a lack of supply sent inflation soaring at the sharpest rate in decades.
He said people were still asking why everything felt so expensive, even though inflation was much nearer the Reserve Bank’s targets than it had been.
Conway said, since the start of the pandemic, overall prices had risen by 26 percent and the price of some essentials had increased much more.
Reserve Bank chief economist Paul Conway Supplied
Wages rose 32 percent but that increase was probably not evenly felt – people who moved jobs were more likely to have received larger wage increases.
Conway said that for the past five years, one or more of a range of everyday household essentials that were hard to avoid had been increasing strongly in price at almost every point. “That included prices for council rates, construction services, some foods – including meat and butter, and insurance.
“Because households cannot easily avoid some of these costs, this has no doubt added to the sense of a ‘cost-of-living crisis’.”
RNZ / Unsplash
Rates, insurance and gas had jumped particularly in recent years.
Tobacco products were among the most expensive in the OECD and milk, cheese, eggs and fruit prices were well above the average. Seafood, clothing, and meat were slightly below average.
“For services, the price of construction in New Zealand is the highest in the OECD and more than double the average. This is undoubtedly a handbrake on housing and infrastructure development here. In fact, the price of ‘capital formation’ – which covers machinery, equipment and construction – is 70 percent above average in New Zealand and also the highest in the OECD. The price of housing services and utilities in New Zealand is also assessed as being the most expensive in the OECD.”
He said low and stable inflation mattered for the cost of living but it was not the whole story.
The price of construction in New Zealand is the highest in the OECD and more than double the average. Supplied/ Unsplash – Josh Olalde
Monetary policy – such as the official cash rate set by the Reserve Bank – could help to anchor prices but not make New Zealand affordable on its own. He acknowledged that inflation ended 2025 just above the Reserve Bank’s 1 percent to 3 percent target band and was likely to be more elevated because of the Middle East conflict.
He said what mattered for households was their purchasing power.
Before 2020, the purchasing power of wages in New Zealand was growing faster than the OECD average on the back of strong employment growth and favourable terms of trade.
“Today, while wage purchasing power is around average across all 38 OECD members countries, it is about 20 percent below the average of the more advanced OECD economies that we typically compare ourselves to.”
Productivity the key
For there to be continued sustained improvements in purchasing power, there would have to be more productivity, he said.
Real per capita income in New Zealand was below the OECD average, he noted. It had been about 80 percent of the average until the mid-2000s then increased to more than 95 percent by 2020.
“Since 2020, real income in New Zealand has fallen back to around 90 percent of the OECD average and the income gap vis-à-vis Australia has widened. Purchasing power, as measured by real income, has not kept pace with the rest of the OECD nor Australia since the beginning of the pandemic.”
Wages had declined less compared to the OECD average and were at best average, he said.
“Importantly, this is compared to all 38 current OECD member countries, which includes several emerging economies. Compared to the 30 OECD member countries in 2010, average incomes in New Zealand sit around 20 percent below the average.”
He said productivity growth would be the single most powerful determinant of higher real incomes and better purchasing power over the long run.
“New Zealand’s productivity performance leaves much to be desired and has lagged other OECD economies. Further, productivity growth in the New Zealand economy fell significantly following the global financial crisis and has been negative in the wake of the pandemic.
“While low and stable inflation is a key ingredient in lifting productivity and improving purchasing power, it is insufficient on its own. By anchoring prices, monetary policy creates the conditions for growth. But sustained gains in purchasing power require structural improvements in the economy.”
The conflict in the Middle East is a timely reminder of how quickly geopolitics can disrupt the global economy, Reserve Bank chief economist Paul Conway says. AFP / Atta Kenare
Measures to improve resilience
He said a more fragmented and unpredictable global economy would raise the stakes for ensuring New Zealand’s structural policies were resilient, adaptive and fit for purpose.
“We are in a new era of heightened geopolitical risk and persistent uncertainty, with the conflict in the Middle East a timely reminder of how quickly geopolitics can disrupt the global economy. At the same time, cross-country flows of trade, capital, and people are shifting, governments are becoming more interventionist, and the rules-based order that once underpinned global integration has weakened considerably.
“This is not a temporary shock that we can simply wait out. It’s a durable shift that makes the global economy more difficult and dangerous for small economies like New Zealand. We are more exposed to external shocks, fragile global supply chains, and shifts in global rules and norms over which we have little control.”
He said sustaining living standards would depend on structural policy settings that built resilience into the structure of the economy by encouraging flexibility, investment and adaption.
“A more resilient and flexible economy would mean monetary policy does not have to work as hard, or be as aggressive, to stabilise inflation as shocks wash through the economy.
“While monetary policy plays a critical role in responding to shocks, it cannot solve New Zealand’s ‘cost-of-living crisis’. Low and stable inflation underpins economic stability and is critical for sustained gains in purchasing power. But monetary policy does not create prosperity directly. It creates the conditions in which prosperity can endure.
“Improving the purchasing power of New Zealand households requires improved productivity. Productivity gains support stronger real wage growth, while competitive markets help keep price increases in check… stronger productivity raises the economy’s speed limit – allowing faster growth without inflation. A more resilient and flexible economy also means monetary policy doesn’t need to be as aggressive to keep inflation stable when shocks hit.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
LiveNews: https://nz.mil-osi.com/2026/03/25/new-zealand-is-expensive-reserve-bank-economist-says-heres-what-we-can-do-about-it/
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