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According to Dominick Stephens, chief economist at Westpac, next week’s RBNZ OCR decision is an incredibly close call and they think that there is a 55% chance of an OCR cut, and a 45% chance of an on hold decision.

Key Quotes

“GDP growth has fallen well short of the RBNZ’s lofty expectations. If the economy stays slow, inflation will be stuck below 2%.”

“Regardless of the OCR decision, we expect the RBNZ to drop its OCR forecast to around 1.4%.”

“In the event of a cut, the RBNZ will leave the door open to further cuts without making  promises. – If the OCR is kept on hold, we expect the RBNZ will strengthen its easing bias.”