WELLINGTON, April 9 (Reuters) – New Zealand Reserve Bank Governor Anna Breman said on Thursday that she still expected to see the country’s economy grow in 2026, particularly if the ceasefire in the Middle East\u00a0holds.<\/p>\n
\n Breman told radio station Newstalk ZB that while she was a little cautious about giving forecasts, she expected to see growth this year because high-frequency data for January and February showed growth was picking up.<\/p>\n
\n In “March people started being worried, but it was a little bit ‘business as usual’. I think April is going to look a bit worse… but again if we see the ceasefire holding, if we see the fuel prices coming down, I think businesses will pick up and we can see good numbers this year,” she added.<\/p>\n
\n On Wednesday, New Zealand’s central bank held the cash rate at 2.25%, buying time to assess the fallout from the Middle East war but signalling it will act decisively if inflation heats up.\u00a0 New Zealand’s economy started to show signs of improvement in the second half of 2025 but higher interest rates and uncertainty remain a concern.<\/p>\n
\n The Reserve Bank said in Wednesday’s release that inflation was expected to rise to 4.2%, well outside the central bank’s target band of 1% to 3%.<\/p>\n
\n Breman said even if the ceasefire holds and broadly speaking things return to normal, some inflationary effects will linger because it’s not only oil but supply chains that have been impacted.<\/p>\n
\n “But I do think we can see a nice spike and then inflation falling,” she said. “But we will have to follow all the data and then continuously update those kind of forecasts.”<\/p>\n
(Reporting by Lucy Craymer; Editing by David Gregorio)<\/p>\n
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