The population surge prompted the Reserve Bank to warn that the extra demand for houses and rental accommodation might add to inflation. The government has labeled the situation as “unsustainable” because it’s creating stress on infrastructure and education and health services.
A sixth consecutive decline in net immigration may give the RBNZ confidence it won’t need to raise interest rates further, although the economy still has to absorb the extra people who have arrived. Immigrants have increased the labor force, making it easier for employers to find workers and taking the pressure off wage inflation.
The downtrend in immigration is being driven by fewer foreign arrivals but also, significantly, an increase in departures, particularly of New Zealand citizens as a sluggish local economy reduces hiring and wage growth.
A record 130,649 people departed in the year through April, today’s report showed. That included a record 81,200 citizens — with an estimated 10,558 departing in April alone.
The RBNZ and other forecasters have projected immigration will slow over the next two years, but have been confounded by regular upward revisions to the series, which reflects the way the data is compiled.
However today’s data showed downward revisions. Annual net immigration in March has 4,700 less than reported a month ago while the October 2023 peak is now 1,340 lower.
