New Zealand
- Business Central
- Oct 29, 2024
- 1 min read
Updated: Nov 5, 2024
The RBNZ began its cutting cycle a full year ahead of forecasts in September, reducing the OCR to 5.25%.
This was followed by another cut of 50 basis points in October, along with confirmation that annual inflation has returned to the central bank’s target range, sitting at 2.2%.
Expectations are for further cuts at future RBNZ meetings, with the OCR to settle at 3% by about mid-2027.
Meanwhile, GDP declined 0.2% in the June 2024 quarter and the number of insolvencies for New Zealand companies was the highest in eight years. It was not as weak as expected, narrowly avoiding a technical recession.
Although GDP grew 0.1% in the first three months of the year, it was largely driven by population growth due to record-high immigration.
GDP has been broadly flat since late 2022 and the RBNZ assumes that GDP will decline further in the September 2024 quarter.