RBNZ

Economic activity in New Zealand is on the rise, with the economic outlook aligning with the inflation target over the medium term, providing confidence for continued interest rate cuts. However, significant spare capacity remains in the economy, and domestic inflationary pressures are expected to continue easing. Employment growth is projected to rebound in the second half of the year as domestic activity picks up.

The Reserve Bank of New Zealand (RBNZ) has warned of risks from global trade frictions, geopolitical shocks, and U.S. tariff policies. It emphasized its readiness to respond flexibly to potential shocks to ensure medium-term inflation stability and economic resilience.

On Wednesday, the Committee reached a consensus to reduce the Official Cash Rate (OCR) by 50 basis points to 4.75% as expected, marking the second consecutive rate cut. The monetary policy statement showed that the New Zealand economy is now in a position of excess capacity and economic activity is sluggish. The Committee agreed that excess capacity has dampened inflation expectations and that price and wage changes are now more in line with a low-inflation environment.

The Reserve Bank of New Zealand has released its latest Financial Stability Report.

The Reserve Bank of New Zealand (RBNZ) unexpectedly cut interest rates by 25 basis points at its August meeting. Members believe that all measures of core inflation have fallen and the components of CPI that are sensitive to monetary policy have declined further. Headline inflation will return to the target range in the third quarter.