Search ForexCrunch

Analysts at ANZ point out that the New Zealand economy has been losing steam for a while now and think that this process has a little further to run.

Key Quotes

“There are enough positive growth drivers out there to put a floor under the slowdown by year end, and support a gradual acceleration in growth thereafter. One of these bright spots is the additional monetary stimulus provided by the RBNZ when it cut the OCR in May.”

“While lower interest rates (and the recent depreciation of the NZD) will support growth, we think a little more stimulus will be required to see inflation lift sustainably to the RBNZ’s target mid-point.”

“We’ve pencilled in another 25bp cut for November with a follow up move in February. However, the global data has turned a bit patchy of late. A materialisation of global risks into tangible consequences (eg for commodity prices) would see us bring forward our expectation for the timing of the next OCR cut.”