The Official Cash Rate (OCR) has remained fixed at 1.75% and will remain static for some time to come, according to the Reserve Bank of New Zealand.
Economic growth and employment have remained robust, but consumer price inflation remains below the 2% target mid-point. This is partly due to low food and import price inflation, and subdued wage pressures.
Global economic growth is predicted to continue supporting demand for New Zealand’s products and services, and ongoing spending and investments by households and government is expected to support further growth. Global inflation pressures are estimated to rise, but will remain contained.
Emerging capacity constraints are projected to see New Zealand’s consumer price inflation eventually rise to meet the 2% annual target; RBNZ says it expects to keep the OCR at its currently level for a considerable period of time to best facilitate this.