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4 Sep 2015
New Zealand: Another rate cut on the cards - HSBC
FXStreet (Delhi) – Economists at HSBC, expect the RBNZ to cut its cash rate by at least 25BP in its forthcoming meet on 10th Sept and a further cut in fourth quarter. Inflation in New Zealand is expected to rise, but the economy needs further easing to sustain the growth.
Key Quotes
“Dairy prices are at low levels and consumer and business confidence have fallen sharply in recent months.”
“Partly offsetting this weakness is a pick-up in tourism and construction, although overall growth is still slowing.”
“Nonetheless, over the medium term the RBNZ will need higher domestically-generated inflation if overall. CPI is to average 2% on a sustained basis. That presents something of a challenge, given recent inflation.”
“That presents something of a challenge, given recent inflation trends and the softening growth outlook. Further easing is needed. With growth slowing and inflation still very low, we expect the RBNZ to cut its cash rate by 25bp to 2.75% on 10 Sep and to cut again in Q4.”
Key Quotes
“Dairy prices are at low levels and consumer and business confidence have fallen sharply in recent months.”
“Partly offsetting this weakness is a pick-up in tourism and construction, although overall growth is still slowing.”
“Nonetheless, over the medium term the RBNZ will need higher domestically-generated inflation if overall. CPI is to average 2% on a sustained basis. That presents something of a challenge, given recent inflation.”
“That presents something of a challenge, given recent inflation trends and the softening growth outlook. Further easing is needed. With growth slowing and inflation still very low, we expect the RBNZ to cut its cash rate by 25bp to 2.75% on 10 Sep and to cut again in Q4.”