inflation spike caused by the conflict was temporary<\/a> and the effects would pass relatively quickly.<\/p>\n“We still believe this is a shock that needs to be looked through, with a focus on maintaining conditions that support the recovery and rebuild demand.”<\/p>\n
Kiwibank expects inflation to peak at 4.2 percent in the current quarter before gradually decreasing to the middle of the Reserve Bank’s 1-3 percent target band next year.<\/p>\n
Kerr said the RBNZ needed to hold rates steady to give the economy stability and stimulation.<\/p>\n
“I don’t mind if the economy runs a little faster into next year, I don’t worry about the inflationary risks because what we’re seeing is that this is a very temporary shock.<\/p>\n
“Where will the growth come from, it will come from us getting back off our knees.”<\/p>\n
He said a better housing market would help lift construction, a low currency would help exports and support tourism, and low interest rates would support households and consumer spending.<\/p>\n
Two scenarios<\/p>\n
The Kiwibank economists offered two economic scenarios.<\/p>\n
The downside, which they put at an “uncomfortable 20 percent chance”, was based on a deeper slowdown in global growth, complicated by supply disruptions, and the New Zealand economy falling back into recession.<\/p>\n
The upside assumed a swift rebound in the domestic economy as oil prices got back to normal, better confidence lifted activity and demand.<\/p>\n
“We would put it at a 25 percent chance.”<\/p>\n
Kerr said the election would likely put a brake on investment and activity, but given RBNZ support growth could reach 3 percent next year.<\/p>\n","protected":false},"excerpt":{"rendered":"Kiwibank says economic recovery will be a 2027 storyChief economist says Reserve Bank needs to give economy a…\n","protected":false},"author":2,"featured_media":501389,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-501388","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/501388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=501388"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/501388\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/501389"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=501388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=501388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=501388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}