NZ economy shrinks, fuelling bets of steeper rate cuts
Since the New Zealand economy was declined and the global uncertainty weight, it narrowed more than expected in the second quarter and increased the expectations of a more upright reduction in October.
Official data on Thursday show that Gross domestic product (GDP) fell 0.9 percent in the previous quarter in the second quarter, worse than analysts, and New Zealand is worse than a decrease estimates of 0.3 percent.
The New Zealand economy has made a three -third contract in the last five quarters.
New Zealand statistics decreased by 0.6 percent annually. The market had waited for it to remain unchanged.
Following weak data according to the vain, the two -year swap rates fell to 2.7290 percent of the lowest points since the beginning of 2022. KIWI dollar fell to $ 0.5932, fell to $ 0.5932.
The market is priced at the official cash ratio (OCR) to 58 basis discount points for the official cash ratio (OCR).
In August, the Central Bank marked two more deductions in 2025, as expenditures made by the Central Bank, households and enterprises were restricted by the uncertainty, falling employment, some basic prices and declining housing prices.
Westpac Senior economist Michael Gordon said in a note, he said, “As a result of weaker GDP than expected, Rbnz will encourage Rbnz to even further reduce OCR this year,” Westpac said.
Westpac is now waiting for the Central Bank to reduce 50 basis points in October and 25 basis points in November.
The weakness in the economy, the construction sector declined, slowing down the export of goods and hurting and tourism stagnated as the service sector remained weak.
In April, the economy further hurt by the United States with the decision to give import tariffs from various countries, including New Zealand.
Since then, the tariff has been determined as 15 percent of 10 percent of the goods from neighboring Australia.
New Zealand Finance Minister Nicola Willis said that international turmoil and uncertainty about tariffs have a clear impact on the willingness of companies and households to make investment decisions.
However, with slight healing of monthly employment and card expenditure data, there are indicators that the economy begins to turn the corner in the third quarter.
Anz Senior Economist Matthew Galt said in the third quarter, albeit quietly, claimed that the country will avoid another technical stagnation.
If the data remained inanimate in the coming weeks, Galt was absolutely high, even though the rod was higher at the end of the monetary policy cycle for large -sized movements.
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