New Zealand: Selected Issues

International Monetary Fund

No 2026/231, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper contributes to a small but growing literature on the economic impact of Artificial Intelligence (AI) in New Zealand. AI presents a significant opportunity to address New Zealand’s persistent productivity challenge, although the scale of potential gains remains uncertain. Approximately 60 percent of New Zealand workers are employed in occupations exposed to AI, with around half positioned to benefit from AI adoption and the remainder facing potential displacement risks. AI adoption is already expanding, particularly within professional, technical, and financial sectors, accompanied by rising demand for AI-related skills. New Zealand ranks highly on the IMF’s AI Preparedness Index, supported by strong regulation and digital infrastructure; however, relatively low research and development (R&D) intensity remains a key structural constraint. Task-based modelling suggests that AI could increase annual productivity growth by approximately 0.1–0.4 percentage points over the next decade. Realising these benefits will depend on effective AI–worker complementarity, access to capital, and economy-wide productivity gains. Supporting deeper capital markets, stronger competition, increased R&D incentives, and worker reallocation will therefore be essential to maximising AI’s contribution to long-term economic growth.

Pages: 24
Date: 2026-08-27
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