Sure! Here’s a more conversational and expanded rewrite of the article, keeping it clear and engaging for a general audience:
💬 Reserve Bank Clears the Air on Economic Forecasts – Here’s How They’re Really Done
Reserve Bank Chief Economist Paul Conway is setting the record straight. Amid growing chatter and occasional misinformation in the media about how the Reserve Bank forecasts economic trends, Conway has offered a peek behind the curtain.
“I see a bit of misinformation coming through the media from time to time on how we do forecasts,” Conway said, noting that some opinion pieces he’s seen are “wrong in so many ways.” He didn’t name names or go into specifics, but the message was clear — it’s time to understand how the Reserve Bank really gauges the pulse of the economy.
📉 Traditionally, people focus on quarterly GDP data — like the numbers we get from Stats NZ. While those are important, Conway said they don’t tell the whole story, especially because they’re often released weeks after the fact. By then, he said, “the economy has already moved forward.”
So how does the Reserve Bank stay up-to-date with real-time economic shifts? The answer lies in a modern approach called Nowcasting.
What is Nowcasting?
Nowcasting is a forecasting method that uses a wide range of real-time data to assess current economic conditions — way before official stats are published.
It pulls from things like:
- Business and consumer surveys
- Activity in financial markets
- Consumer spending patterns
- Traffic flow
- Internet search trends
These insights help the Bank get a much quicker and more accurate sense of what’s going on across the economy at any given moment.
“This tool is especially crucial during times of uncertainty,” Conway said. “When the economy changes quickly, we need to be able to respond with speed and precision.” It’s Not Just One Model
Another interesting fact? The Reserve Bank doesn’t rely on just one forecasting model. Instead, they use multiple models, each with its own strengths and weaknesses, and then combine them to form the clearest possible picture.
Conway said this blended approach helps ensure their forecasts are robust and reflect what’s really happening on the ground.
Weekly Updates Coming Soon
To be more transparent, the Reserve Bank will now begin publishing weekly updates on the performance of one of their key models — called “Kiwi-GDP” — which estimates the country’s GDP growth in real-time.
These updates are expected to go live every Friday afternoon on the Bank’s website.
So, what’s the current picture? Kiwi-GDP estimates that the New Zealand economy grew just under 0.8% in the first quarter of 2025. That follows 0.7% growth in the last quarter of 2024.
Together, those numbers suggest the economy is bouncing back from the recession we experienced in the first half of last year.
In short, while headlines and opinion pieces may sometimes paint a different picture, the Reserve Bank’s approach is both data-rich and forward-thinking — and now, they’re bringing the public along for the ride.
-Tin Bureau
