Reserve Bank of New Zealand forecast from Westpac Bank in New Zealand.
Westpac revises RBNZ rate cut forecast, now sees easing in October, November
- Westpac now expects the Reserve Bank of New Zealand to cut the official cash rate by 25 basis points to 5.25% in October.
- The official interest rate is expected to be cut by another 25 basis points in November, to reach 5% by the end of the year.
- The bank points to weak growth expectations and high unemployment rates as key factors.
- GDP is expected to decline by 0.6% in the second quarter of 2024.
- The unemployment rate is expected to peak at 5.6% in 2025.
- Inflation is expected to return to the 1-3% target range in the third quarter of 2024.
- The official interest rate is expected to reach 4.5% by May 2025, then decline to 3.75% in early 2026.
Kelly Eckhold, chief economist at Westpac Bank, said the Reserve Bank of New Zealand is likely to take a “measured, data-driven approach” to easing monetary policy. The bank does not see the RBNZ as “panicking” despite the weak economic data, with domestic inflation still a concern.