OCR increases should start sooner rather than later
ASB senior economist Mark Smith says OCR hikes are a matter of when and not if, with businesses and professional forecasters taking part in the RBNZ’s latest Survey of Expectations seeing a steeper policy track over the year ahead, even though longer-term rate expectations remain slightly below ASB’s 3.25% neutral estimate.
The RBNZ’s survey also shows annual house price increase expectations slumped to 0.33% and 2.80% for one and two years ahead respectively. ASB chief economist Nick Tuffley says this will cause few sleepless nights at the RBNZ.
In its latest Economic Overview, Westpac’s economics team says while raising the OCR later this month is an option for the RBNZ and allows for a more gradual path which could be desirable given uncertainty over the duration of the Iran war, tightening when confidence is fragile could exacerbate the downturn.
Westpac doesn’t expect a recession. The bank’s view is that the Iran war will merely cause a pause in the economic recovery.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
