PHOTO: ANZ chief economist Sharon Zollner
🏦 New Zealand’s biggest bank has just made a bold prediction: the Reserve Bank will need to slash the Official Cash Rate (OCR) down to a historic low of 2.5% as the economy struggles to regain momentum.
📉 ANZ now expects two more 25 basis point cuts, one in August and another in October 2025 — pushing the OCR lower for longer than previously forecast. Originally, ANZ tipped July to be the final cut.
💬 “The recovery is underway, but it’s looking patchy and slower than we’d hoped,” said ANZ chief economist Sharon Zollner. “More monetary policy support is needed to stop inflation from falling below target and to keep the recovery alive.”
🧊 Here’s What’s Fueling the RBNZ Rate Cut Forecast:
-
⚠️ Stop-start economic recovery
-
🌍 Global trade uncertainty hitting New Zealand’s export-heavy economy
-
🏠 Housing market slowdown – house price growth set to cool to just 2% this year
-
📉 GDP downgrade – 2025 growth forecast slashed from 1.3% to just 1%
-
📊 Unemployment expected to peak at 5.3% before falling to 4.6% by 2026
🔮 What’s Next for the OCR? Zollner says the RBNZ could start lifting rates again in late 2026, gradually returning to a neutral level of 3% — where the economy is neither being stimulated nor held back.
“The Reserve Bank is well-positioned to act quickly if global risks worsen,” she added, pointing to cooling inflation pressures and financial market volatility as key watchpoints.
💥 Bottom Line: With the global economy teetering and New Zealand’s recovery still fragile, ANZ says deeper cuts are now insurance against a potential slowdown — meaning cheaper borrowing costs could be here to stay a while longer.
📌 Whether you’re a homeowner, investor, or first-time buyer, this could be the window of opportunity you’ve been waiting for — before the tide turns again in 2026.
SOURCE: RNZ