Inflation Tamed; Calls for Rate Cuts Grow

BNZ economists urge the Reserve Bank of New Zealand (RBNZ) to cut interest rates as inflation appears controlled. According to BNZ's latest Economy Watch, pricing intentions have dropped, the labor market is easing, and growth has stalled. The Quarterly Survey of Business Opinion (QSBO) supports this, showing a significant decline in businesses planning price increases

Despite the RBNZ's projection of maintaining the Official Cash Rate (OCR) at 5.5% until August 2025, major banks predict a rate cut in November. The QSBO indicates a net 10% of employers plan to reduce staff, hinting at rising unemployment. Economists from Kiwibank and ANZ also expect earlier rate cuts to prevent economic damage, though the RBNZ may require more concrete inflation data before acting.

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