ANZ New Zealand Research Hub

ANZ New Zealand faces a challenging macroeconomic outlook characterized by a significant negative income shock driven by elevated fuel prices and geopolitical supply disruptions. Current high-frequency data indicates a notable deterioration in consumer confidence and a broader deceleration in economic momentum. Despite this softening, the RBNZ is expected to maintain a restrictive policy stance, with projections pointing toward an Official Cash Rate (OCR) increase to a neutral level of 3.0% by October 2026. The institution anticipates a period of sluggish economic performance, with GDP growth forecasted at 1.5% for the year. Additionally, labor market conditions are expected to tighten, with unemployment projected to climb to 5.8%. Ultimately, the research emphasizes the bank's commitment to prioritizing the containment of medium-term inflation expectations despite the underlying risks to domestic output.