According to ANZ analysts, evidence of a slowdown in global growth continues to accumulate, and the risks of a sharper slowdown have increased.
Key Quotes
“Weaker growth momentum has been broad-based across New Zealand’s trading partners. Central banks have responded to support growth, with easier policy expected going forward. The RBNZ has signalled a more cautious tone, with the next move in the OCR more likely to be down. We are picking November for the first move, with risks skewed towards a cut earlier than this.”
“We expect that capacity pressures will wane as domestic growth continues to underwhelm and the economy will need a further boost from monetary stimulus to push inflation closer to target and see employment remain near its maximum sustainable level. It is possible that inflation might improve more than we expect from here, but worsening global conditions and weaker growth domestically are currently more pressing concerns.”
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