Analysts at ANZ suggest that NZ economy at an interesting juncture as the global outlook remains positive, but downside risks have increased, but domestically, the economy is going through a softer patch.
Key Quotes
“We expect it will struggle to grow above trend from here. That said, cost pressures are increasing and we expect that margin pressure will provide the catalyst needed for firms to pass through price increases, though likely in a gradual fashion. Based on the balance of risks and all else equal, we expect inflation will increase gradually and that the OCR will eventually rise. That said, downside risks have increased that could delay monetary policy tightening. And if conditions deteriorated significantly, we expect a cut could eventuate quite rapidly.”
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