AUCKLAND: Early indicators suggest the economy had been expanding during the second half of this year and demand had stabilised, Reserve Bank of New Zealand (RBNZ) governor Christian Hawkesby tells a parliamentary committee.
The RBNZ cut its benchmark official cash rate by 25 basis points to 2.25% on Wednesday, the lowest since mid-2022, but policymakers signalled an end to the easing cycle as the economy showed early signs of picking up.
“We’re not waiting for a recovery; a recovery is happening right at the moment. ... All our indicators are telling us now that the economy expanded through the third quarter,” Hawkesby said.
Hawkesby said labour market indicators will be the last ones to turn but there are a number of indicators including vacancies, hours worked, hours paid that are starting to turn around.
“Looking to the influence of monetary policy on the labour market, is going to be positive rather than negative,” he said.
Hawkesby said 2026 would have low and falling inflation, and an expanding economy.
“It’s a good environment to be stepping into,” he said. — Reuters
