Our Government has just wrapped up a successful week-long mission in India, where we strengthened economic, defence, sporting, agricultural, and people-to-people ties. The visit was a crucial step in deepening our relationship with one of the world’s fastest-growing economies, and I’m pleased to report that negotiations on a free trade agreement (FTA) with India are now set to begin.
As a small nation at the bottom of the Pacific, trade is essential for our economic growth and prosperity. India, with its population of 1.4 billion and status as the world’s fifth-largest economy, represents a massive opportunity for our exporters. A comprehensive FTA would unlock new markets, create jobs, and increase wages, ensuring long-term economic benefits for New Zealand.
One in four Kiwi jobs relies on trade, and last year alone, our export revenue contributed $100 billion to the economy. Upgrading existing trade agreements and securing new ones allow us to boost exports, attract investment, and drive economic growth. That’s why our Government is pulling every lever and working every relationship to secure better trade deals, welcome foreign investment, build infrastructure, and grow the economy.
At home, there’s more positive economic news. Stats NZ recently announced that New Zealand’s GDP grew by 0.7% in the December 2024 quarter. This is a clear sign that our economy is turning the corner, and the outlook for further growth in the quarters ahead is encouraging.
Our core focus as a Government is to deliver economic growth that provides more opportunities, jobs, and higher wages—putting more money into the pockets of hardworking Kiwis and helping with the cost of living. A strong economy doesn’t just mean better job prospects and wages; it also allows us to invest in essential public services like health and education.
We’ve taken decisive action to get our economy back on track. We’ve delivered tax relief for the first time in over a decade, helping ease the financial pressure on households. FamilyBoost is providing crucial support to thousands of families by making early childhood education more affordable. And we’ve ensured that Government spending is responsible, directing resources towards delivering world-class public services instead of wasteful bureaucracy.
Another key achievement has been tackling inflation, which has now fallen to 2.2%—down from 5.6% when we took office. Lower inflation has paved the way for successive cuts to the Official Cash Rate (OCR), which now sits at 3.75%. These cuts have led to banks reducing mortgage interest rates, meaning homeowners can expect to see more money in their bank accounts after renegotiating their mortgages.
We’re also backing the industries that drive our economy—our farmers, growers, and tourism operators—by promoting New Zealand as an outstanding place to do business.
We know there’s still work to do, but the combination of a strengthening economy, falling inflation, rising trade opportunities, and strategic investment puts New Zealand in a strong position for the future. Our Government is committed to doing everything we can to sustain this momentum—because ultimately, economic growth means more jobs, higher wages, and a better quality of life for all Kiwis.
-by Rt Hon Christopher Luxon, Prime Minister of New Zealand
