Reserve Bank of New Zealand updated forecasts for the path ahead, see the:
- official cash rate at 4.57% in March 2023 (previously at 4.03%)
- official cash rate at 5.5% in December 2023 (previously at 4.1%)
- twi nzd at around 70.0% in December 2023 (previously at 71.7%)
- annual cpi 5.0% by December 2023 (previously at 3.8%)
- official cash rate at 5.5% in march 2024 (previously at 4.09%)
- official cash rate at 4.35% in December 2025
More:
- Monetary conditions need to tighten further
- Remains resolute in achieving monetary policy remit
- Productive capacity of the economy is being constrained by broad-based labour shortages, and wage pressures are evident
- Core consumer price inflation is too high, employment is beyond its maximum sustainable level,
- Household spending remains resilient
- Employment levels are high, and income growth and household savings are supporting spending
- Committee agreed that the OCR needs to reach a higher level, and sooner than previously indicated,
- Aggregate demand continues to outstrip New Zealand's capacity to supply goods and services
- Near-term inflation expectations have risen.
- A range of indicators continue to signify broad-based inflation pressure
From the Minutes:
- Committee gave consideration to an increase in the ocr of 75 or 100 basis points
- Members agreed that a larger increase in the ocr was appropriate
- Members agreed ocr needed to reach a level where it was confident it would reduce actual inflation to within the target range
- Members agreed that this level had increased since the time of the august statement
- Committee agreed that the level of settlement cash balances is not a source of unexpected inflationary pressure
- Members viewed the risks to inflation pressure from fiscal policies as skewed to the upside
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Background to this is here: