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Immigration in New Zealand has reached a new all-time high, moving further into “unsustainable territory.”

In the year ended October, net immigration increased to more than 128,900, according to findings from Statistics New Zealand published on Tuesday in Wellington.

The rise included the arrival of around 173,400 non-New Zealand citizens, countered by the departures of 44,500 citizens, Bloomberg reports.

The Reserve Bank of New Zealand’s (RBNZ) initial relief following the pandemic that foreign workers would alleviate labour market pressures and wage inflation has now shifted to concern, as inflation remains sticky.

In November, markets were surprised as the central bank indicated a greater risk of a rate hike in 2024, as the concern over the spate of new arrivals is driving up rents and house prices.

Earlier this month, deputy governor Christian Hawkesby said the RBNZ could not ignore the increase in immigration despite the fact it’s forecast to dip next year, as inflation has remained above the target of between 1% and 3% for some time. Indeed, the central bank forecasts the current 5.6% figure will return to the top of the range by Q3 2024.

On Monday, Prime Minister Christopher Luxon said immigration exceeding 118,000 in September “doesn’t feel sustainable,” and he predicts it will fall. The government is aiming to ensure skills shortages are filled but that the country’s housing and other infrastructure isn’t affected, he added.

Net arrivals in October, at around 9,300, were the lowest since December according to the report out on Tuesday, fuelling signs the influx could be weakening.

“We expect the RBNZ to remain wary of a net migration boost to housing and economy-wide inflationary pressures. With core inflation only slowly declining, restrictive OCR settings will be needed for a while yet. We do not expect cuts until 2025,” said Mark Smith, senior economist at ASB Bank in Auckland.

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  • Immigration,
  • RBNZ

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