Bollard to cut rates again
Of the 11 economists Good Returns surveyed, seven are now expecting a cut in the official cash rate (OCR) from 3.5% to 3% while the other four are still expecting a cut to 2.5%.
The Reserve Bank of Australia’s (RBA) decision to leave rates unchanged earlier this month was a factor in a number of economists pulling back their forecasts.
Craig Ebert at Bank of New Zealand, which has pulled back its expectations to a 50 basis point cut from 75 points previously, says some of the domestic indicators haven’t been quite as bad as they might have been.
"The RBA is relevant but only in its indirect message. We’re not in collapse mode down under," Ebert says. While New Zealand’s trade figures, for example, showed exports up by 3% in January, a tepid increase despite the sharply lower currency, that nowhere near as bas as Japan’s 45.7% drop in exports in January.
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