Wellington's spending dropped 2.8 percent over the year, compared to a fall of 1 percent for the country. File photo.

Wellington's struggling economy is expected to be hit with another blow, with the government planning to cut 8700 jobs from the public sector by mid-2029.

There are currently just over 63,000 full-time public servants, which is a slight decrease under this coalition government from the high of about 65,000 in the 2024/25 year.

Wellington typically has less unemployment than other parts of the country, but annual average unemployment rate in the central Wellington area was 5.1 percent in the year to December 2025, up from 4.7 percent in the previous 12 months, Infometrics data showed.

It said Wellington's spending dropped 2.8 percent over the year, compared to a fall of 1 percent for the country.