PHOTO: RAWPIXEL. FILE
EDITORS COMMENT: “Refusing to adjust the OCR amid rising employment, minus net migration, faltering business conditions, and sluggish retail figures would be a missed opportunity by the Reserve Bank—an oversight bordering on folly in our humble opinion.” www.propertynoise.co.nz EST. 2015
Westpac foresees no adjustment to the Official Cash Rate (OCR) as the Reserve Bank announces its decision next week for May. The bank attributes this forecast to persistent inflation, which prevents any celebration over a rate cut. Notably, Westpac anticipates no substantial alteration in the RBNZ’s OCR projections, with any easing likely postponed until 2025.
In line with this, a quarterly economic report from ANZ bank economists echoes the sentiment, projecting that a rate cut won’t materialize until May 2025. The report highlights various economic drivers, such as housing, fiscal policy, net migration, and terms of trade, which are aligning with the slowdown the RBNZ seeks.
Despite some economic indicators suggesting a sluggish performance, ANZ notes that drivers of economic momentum instill confidence in a slowdown. Factors such as high net migration, stabilized house prices, and consumer pessimism shifting towards job insecurity rather than inflation contribute to this perspective.
BREAKING NEWS: Our ‘One Trick Pony’ RBNZ keeps the Official Cash Rate on hold at 5.5%
Unemployment has risen to 4.3 percent, with the Reserve Bank expecting a further increase to 5.1 percent by early 2025. Consequently, ANZ suggests that the RBNZ will need to maintain pressure for a while to rein in inflation within the Reserve Bank’s target band of 1-3 percent by the third quarter of 2024.
SOURCE: NEWSHUB