In the November Monetary Policy Statement, RBNZ projected that interest rate would peak at 5.5% while the economy would start contracting in Q2 2023 until Q1 2024.
NZIER said it expected the negative impact of higher interest rates on demand will “become more apparent around mid-2023”. With that, RBNZ “will not need to increase interest rates by as much as it currently expects to”.
“Nonetheless, we expect further increases in the OCR and for it to peak at 5 percent over the coming year,” NZIER added.
