While it’s going to hurt some households more than others, ANZ is hopeful this slowdown will turn the tide on domestic inflation and set the broader economy on a more sustainable path over the longer run.
“We’re hopeful this slowdown will turn the tide on domestic inflation.”
Interest rates could easily go higher or lower than we are forecasting but we think risks are broadly balanced around ANZ Research’s recently updated Overnight Cash Rate (OCR) call for a peak of 5.25 per cent.
But no doubt 2023 has a few surprises waiting for us…. This time last year we were forecasting a peak OCR of 3 per cent and as we go to print the OCR is at 4.25 per cent and still rising!
The story so far …
Recession is looming in New Zealand … slower domestic demand due to higher interest rates is expected to more than offset the net exports recovery brought about by the tourism rebound and weaker imports.