OCR stays at 2.5%
“New Zealand’s trading partner outlook remains weak,” Reserve Bank governor Alan Bollard said. “Several euro-area economies are in recession and Chinese growth has slowed. The risk of significant deterioration in the euro area persists.”
Bollard says that the New Zealand economy was expected to grow “modestly” in the next few years.
On the positive side: “Housing market activity continues to increase as forecast and repairs and reconstruction in Canterbury are expected to further boost the construction sector.”
However offsetting the positives are “constrained demand growth, and the high New Zealand dollar continues to undermine export earnings and encourage substitution toward imported goods and services.”
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