In its latest Quarterly Forecasts, the New Zealand Institute for Economic Research (NZIER) states that Rising interest rates and high inflation around the world pose a threat to New Zealand’s economic recovery in the next years.
main conclusions
“Central banks around the world have raised interest rates at a rapid pace in response to the general increase in inflation.”
“Nevertheless, Resilient demand and continued capacity pressures keep costs high in the New Zealand economy.
“The Reserve Bank expects to carry out a further and substantial tightening of monetary policy in order to cushion demand to curb inflation”.
“We expect the negative impact of the rise in interest rates on demand to become more evident by mid-2023so the Reserve Bank will not need to raise interest rates as much as it currently expects.”
“Nevertheless, we expect further OCR increases and to reach a maximum of 5% over the next year.”
Source: Fx Street
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