NZ At A Glance

New Zealand at a Glance

Stephen Toplis -

The New Zealand economy is struggling. It has contracted in three of the last four quarters. We expect more of the same until the second half of this year. All this despite rapid population growth and a resurgence in tourism. With labour supply expanding rapidly and demand growth moderating, the labour market is easing quickly. All this means inflationary pressures are abating, but the RBNZ is not convinced the reduction in inflation is fast enough nor necessarily sustainable. Accordingly, it remains reluctant to provide any suggestion the cash rate might fall any time soon.