NZ: OCR on hold at 2.25% with inflation expected to fall

Annual consumers price inflation was slightly above the Monetary Policy Committee’s 1 to 3 percent target band at the end of 2025. Increases in food and electricity prices and local council rates were the biggest contributors to above-target inflation. The economy is at an early stage in its recovery. With ongoing strength in commodity prices, economic activity in the agricultural sector and regional New Zealand remains strong. Although residential and business investment is increasing, households remain cautious in their spending. The labour market is stabilising, but unemployment remains elevated. House price growth remains weak, dampening household wealth and inclination to spend. In response to previous cuts in the OCR, economic growth is broadening across sectors of the economy, such as manufacturing, construction and some retail. Economic growth is expected to increase over 2026. RESERVE BANK OF NEW ZEALAND SEES OFFICIAL CASH RATE AT 3% IN MARCH 2029 RESERVE BANK OF NEW ZEALAND SEES ANNUAL CPI 2.1% BY MARCH 2027 RESERVE BANK OF NEW ZEALAND SEES OFFICIAL CASH RATE AT 2.52% IN MARCH 2027 VERSUS 2.34% OCR ON HOLD AT 2.25 PERCENT AS INFLATION EXPECTED TO… Just in | RBNZ projects NZD's Trade-Weighted Index to reach approximately 68.0% by March 2027.

The seasonally adjusted Wage Price Index (WPI) rose 0.8% this quarter. • Over the twelve months to the December quarter, the WPI rose to 3.4%. • Across both the private and public ...