No waiting – OCR cuts expected next year

The ASB says If that is the case, the RBNZ’s job will be done much quicker than it thinks and it now looks likely OCR cuts will start in the second half of next year, rather than waiting until 2025.

ASB chief economist Nick Tuffley says last week’s 0.3% contraction in GDP figures wasn’t the Christmas present anybody was expecting.

“All up, the level of GDP for the third quarter was 1.6 percentage points lower than we had anticipated.”

What this means, he says, is the recent momentum in the economy has been much slower than anyone had expected. Another way of putting this is that the level of demand in the economy has been lower than anticipated, but the supply capability of the economy has also probably been lower than previously thought.