New Zealand’s annual immigration has continued its deceleration for the third consecutive month in February, indicating a gradual easing of the population pressures that have been concerning policymakers.
According to Statistics New Zealand’s report released Monday in Wellington, annual net immigration decreased to 130,856 in the 12 months through January, down from a revised figure of 133,793. The peak was observed in November last year, reaching 142,159.
The surge in population has raised concerns, with the Reserve Bank warning about the potential inflationary impact due to increased demand for housing and rental accommodation. The government has also labeled the situation as “unsustainable,” citing stress on infrastructure such as education and health services.
The recent signs of a plateau may provide confidence to the Reserve Bank that it won’t need to further increase interest rates, although the economy still needs to absorb the influx of newcomers. The presence of immigrants has expanded the labor force, making it easier for employers to find workers and alleviating pressure on wage inflation.
In response to the situation, Immigration Minister Erica Stanford implemented tighter rules for work visas, now requiring an English language component. This move aims to reduce the influx of low-skilled workers into the country, potentially freeing up jobs for New Zealanders.
Further indications of a potential immigration peak include nearly 47,400 non-residents departing New Zealand in the year through February, while 74,930 citizens left during the same period.
The Reserve Bank and other forecasters have anticipated a slowdown in immigration over the next two years, but continuous upward revisions to the data series have complicated projections.
The latest data for February showed unadjusted net immigration surging to 11,651, the highest since September, and more than twice the figure recorded in January (5,460). Mark Smith, senior economist at ASB Bank in Auckland, noted that part of this increase might be attributed to students beginning a new academic year.
However, Smith predicts a decline in arrivals over the next few years due to the slowing economy, which may reduce the attractiveness of New Zealand as a destination for living and working.