Anyone who's been trying to 'survive until 2025' might be counting down the days until the new year.

But while brighter economic times are likely ahead, don't expect them to begin on 1 January - and it could be the smaller parts of New Zealand that feel the improvement first.

Kelly Eckhold, chief economist at Westpac, said there were already some signs of improvement in the economy but it would probably be at least the middle of next year before things got close to growing in a more normal way again.

But regional New Zealand was likely to see strength sooner than the main centres.

The strong milk payout combined with less cost pressure for farmers would be good for agriculture and regional economies, he said.

"The most positive thing for the economy is the primary sector... [the regions] are the areas most leveraged to things like improvement in dairy prices and terms of trade."

Eckhold said that around the middle of the year, households would have the benefit of having seen inflation low for a while, and would see things improving in the labour market, too.

The official cash rate (OCR) was likely to fall through the first half of the year - economists expect it to land somewhere around 3 percent or 3.5 percent.

Eckhold said he expected a trough of 3.25 percent for the OCR, although that might only mean small drops in mortgage rates because much of the cut had already been priced in, apart from the floating and six-month rates.

Infometrics chief economist Brad Olsen said one of the short-term challenges would be that "we never said survive til the first of January 2025".

"Come the first of January, the economy won't immediately be better.

There are still going to be those challenges that come through but we will be seeing more of those better signs."

He said low interest rates would help to stimulate activity but it would be the second half of the year when things really picked up.

"By that point, a lot of households will have refixed lower which will provide more stimulus in the economy."

Unemployment would continue to increase until about the middle of the year, he said.

"Lags often happen in the labour market, if businesses see alright December and Christmas sales, a few months of ok sales, unless it's amazing for a lot of businesses they're probably not immediately going to need to hire really quickly.

"There's a bit of caution, tentativeness in how they go about it, They'll want to see genuine sales momentum."

He agreed with Eckhold that regional New Zealand could help lead the recovery.

"Regions have got a very good milk payout coming through that will add billions more than originally expected into the economy in terms of spending."

A lift in things such as meat prices would also help.

"They haven't been awesome through 2024 but have recovered to not a bad place, all things considered, at the end of the year and horticulture is still going well.

"All those factors combined suggest regions might help lead the recovery as we head through to next year."

BNZ chief economist Mike Jones said the building blocks for improved economic performance in 2025 were moving into place.

"But if we learned anything from the recent GDP figures it's that any improvement will be coming off a very low base.

"And while our forecasts suggest the overall macro numbers will start to look better through the first part of next year, it may not feel that way given we're probably looking at another six to nine months of weakening conditions in the labour market. A lift in the unemployment rate into the mid-5 [percent] still looks likely.

"So I suspect for many households and businesses the first part of 2025 will feel warily similar to the end of this year, but by the second half I'm hopeful economic conditions will be on a firmer footing. Consumer and business confidence are already well off the lows.

"Dairy incomes are looking healthy. The housing market is stabilising and our expectation is for a modest upturn next year."

He said for most households the impact of reduced interest rates would be felt over the coming months.

"The latest Reserve Bank numbers show that the average interest rate paid on mortgage borrowing has barely fallen to date given the preponderance of fixed-rate mortgage borrowing.

"But over the coming six months a record 51 percent of all mortgage borrowings will experience a rate reset onto likely lower rates.

"Thus, by mid-2025, we estimate the average paid mortgage rate will have dropped from 6.4 percent to around 5.7 percent, with further declines likely over the second half of next year.

"Overall, it does look like the economy is starting to turn a corner but we also know things can change fast.

"There is so much risk packed into 2025 that the only thing we can be certain of is that there will be more volatility and twists and turns in the road that no one expected."

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