Forecast for the Reserve Bank of New Zealand from Westpac in New Zealand.
Westpac revises RBNZ rate cut forecast, now sees October and November easing
- Westpac now expects RBNZ to cut OCR by 25bps to 5.25% in October
- Further 25bps cut expected in November, bringing OCR to 5% by year-end
- Bank cites weaker growth outlook and rising unemployment as key factors
- GDP projected to fall 0.6% in Q2 2024
- Unemployment rate now seen peaking at 5.6% in 2025
- Inflation expected to return to 1-3% target range in Q3 2024
- OCR forecast to reach 4.5% by May 2025, bottoming at 3.75% in early 2026
Westpac's chief economist Kelly Eckhold notes the RBNZ is likely to take a "measured and data dependent approach" to easing. The bank doesn't see RBNZ "panicking" despite softer economic data, as domestic inflation remains a concern.
