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The past year was a tough grind for many households and businesses but forecasters say there is economic improvement on the horizon.
Kelly Eckhold, chief economist at Westpac, said he was expecting the economy to be much stronger in 2026, with growth in GDP of about 3 percent over the year compared to a flat 2025.
"That's supported by lower interest rates in the coming year. Whereas in 2025 we saw relatively strong performance by the primary sector and tourism to some extent but not so much the services sector and the bits of the economy that really drive the major urban areas, we think we probably have much more balanced growth in 2026."
Households might not see much wage growth initially, he said, because that was one of the last things to move, but inflation should be weaker.
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