NEW Zealand posted its biggest calendar-year jump in population since the end of World War Two, reinforcing the scale of the potential impact on demand and inflation from record immigration.

The estimated population increased by 2.8 per cent in 2023, Statistics New Zealand said on Friday (Feb 16) in Wellington. That’s the fastest pace in modern records dating back to 1992, and the most since 1946 according to the previous, discontinued data series. The population rose to 5,305,600 people.

Record immigration is the overwhelming driver of the surge in population. Foreign workers flooded into the country to fill labour shortages after it re-opened its border in 2022 in the wake of the Covid-19 pandemic.

The 145,100 gain in 2023 reflected net immigration of 126,000 and occurred despite a natural increase of just 19,200 – the lowest for a calendar year since the modern data series began.

The Reserve Bank late last year said the impact of population growth on demand for houses and rental accommodation was a concern because it could make it more difficult to return inflation to its 1 to 3 per cent target.

The central bank said earlier on Friday it has more work to do to slow core inflation and anchor inflation expectations, suggesting it will not be signalling a pivot to interest-rate cuts anytime soon.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

There are signs the pace of immigration may have peaked, with a report this week showing net arrivals in December were the lowest in 17 months.

Fourth-quarter population growth eased to 25,700, today’s report showed. That’s the lowest since the third quarter of 2022 and down from a record 43,100 lift in the three months through March. BLOOMBERG