New Zealand’s population is increasing at its slowest rate in almost 13 years, not counting the pandemic period, which adds to the challenges facing its slow economic recovery.

According to Statistics New Zealand, this week in Wellington, the population grew by an estimated 0.6% over the year ending in September, reaching 5.33 million.

This marks the weakest yearly growth since the fourth quarter of 2012, aside from the 2021–2022 period when the country’s borders were largely closed due to Covid-19 restrictions.

New Zealand’s economy has long depended on population growth to drive domestic demand, as productivity, or output per worker, lags behind that of many similar developed countries, Bloomberg reports.

Additionally, foreign workers have traditionally helped fill skill shortages in various industries and supplied labour for key infrastructure projects.

However, demand for migrant workers has declined as economic growth slowed and unemployment increased.

Furthermore, GDP shrank in three of the past five quarters up to June, and economists anticipate only modest growth in the third quarter. Meanwhile, a growing number of New Zealanders are choosing to seek employment and higher wages abroad.

“Migration is well below long-term averages and remains a handbrake on the economic recovery. Slow population growth from weak net migration constrains demand, particularly in retail and housing,” stated Wesley Tanuvasa, an economist at ASB Bank in Auckland.

The departure of citizens has become a political challenge for Prime Minister Christopher Luxon, who claims his centre-right government manages the economy better than the opposition but has yet to persuade voters. His party has been behind in recent polls, with an election scheduled for late 2026.

The latest report indicated that the population grew by 32,900 over the past 12 months, driven by 12,400 net migrants and a natural increase of 20,500 more births than deaths.