Farmers are especially hard hit, with losses in agriculture expected to shave about 1% off economic growth.
New Zeland’s capital Wellington is said to have just 18 days of water left, and parts of the South Island could soon be hit.
But there is likely to be some relief over the weekend when the first decent rainfall in two months is forecast.
The scale of the drought can be seen from space: satellite images show how parts of New Zealand have turned from lush green to parched brown.
Farmers, who traditionally drive the nation’s economy, estimate that the drought has already cost them about NZ$1 billion ($820 million) in lost earnings.
They are now being offered financial assistance by the government to deal with the crisis.
“What we are telling our farmers is forget about this season, start concentrating on next season,” said Derek Spratt, the chairman of New Zealand’s Rural Support Trust.
Some scientists say the unusually dry weather could be a harbinger of climate change.
At the same time, many city residents are enjoying sun soaked days as they go eating lunch outdoors or spend evening on the beach.
And winemakers describe the current conditions as perfect.
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