“However, given the lower exchange rate and the potential for higher imported inflation, we forecast that inflation will push up to 2.8%pa later this year.
“As a result, we expect the bank to cut the official cash rate to 3% by July, but any further reductions will be dependent on expectations for lower, more favourable inflation outcomes.”
Patchy recovery risks delayed until 2027
Although New Zealand showed signs of emerging from a prolonged economic slump in late 2024 and early 2025, recent global market turmoil is now threatening to reverse that progress.
A broader and more robust economic recovery could be delayed until at least 2027, according to Infometrics.
“We’re conscious that the ground has shifted rapidly over the last two weeks and could continue to do so,” Kiernan said.
