OCR rates cuts should dominate next year

In a shock to economists, the economy contracted -0.3% and the technical recession over last summer that was “technically” revised away has been revised back in.

The Kiwi economy is in a much weaker place than originally thought. Economic activity on a per person basis, contracted 0.9% in the third quarter, and the economy is down more than 3% over the year.

The RBNZ’s heavy hand has hurt households and businesses. Restrictive monetary policy is clearly working, say Kiwibank’s chief economist Jarrod Kerr, senior economist Mary Jo Vergara and economist Sabrina Delgado.

“The recession they told us we had, then never had, appears we had to have. And it will most likely be a double dip recession,” Kerr says.