Why is New Zealand, once a coveted destination, seeing a record number of its citizens leaving?
Many have moved to neighbouring Australia due to the increased cost of living, rising interest rates, and unemployment at home.
Recent government statistics show that people are leaving New Zealand in record numbers due to rising unemployment, as economic growth is weak and interest rates remain high, news agency Reuters reported.
In the year that ended June 2024, 131,200 people left New Zealand, provisionally the highest number on record, according to data released by Statistics New Zealand on Tuesday. Around 75% of them were headed to neighbouring Australia.
Among those who departed, 80,174 were New Zealand citizens, almost double the number of people compared to pre-COVID times.
Though the number of immigrant arrivals remains high, economists expect these numbers to fall as the country loses its attractiveness due to a slowing economy.
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During the pandemic, a record number of New Zealanders returned home as the government headed by Prime Minister Jacinda Ardern managed the pandemic effectively.
On Wednesday, the central bank cut interest rates by 25 basis points to 5.25% as inflation converged within its 1 to 3% target. “We are confident that inflation is back within its target band and we can commence our renormalisation of policy interest rates,” Governor Adrian Orr said at a news conference. “It’s been about building the committee’s confidence to get moving, and we’re at that point now.” Previously, the bank had increased rates by a record 5.21%, the highest since the mechanism was introduced in 1999.
The Central Bank Committee noted that domestic economic activity had weakened and became more pronounced in July. “With a broad range of indicators suggesting the economy is contracting faster than anticipated, the downside risks to output and employment that were highlighted in July have become more apparent,” the bank noted.
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People are also frustrated by the increasing cost of living and fewer job opportunities. Many are heading to Australia, the UK, and other countries.
Neighbouring Australia has been offering relocation packages to people finding a job in nursing, policing, and teaching, where the country faces skill shortages. At the same time, New Zealand is also cutting jobs in the public sector, leaving many skilled workers out of jobs.
(With inputs from agencies)