Economists at war over OCR forecasts

Kiwibank economists have hit back at recent calls for OCR hikes saying they are unwarranted, reckless and could potentially induce a recession by adding costs in the cost-of-living crisis.

ANZ recently predicted three OCR rises this year saying it sees the RBNZ becoming too uncomfortable with an OCR in stimulatory territory as inflation inevitably rises because of the US and Israel war with Iran.

Any interest rate rises risk a repeat of past mistakes and any suggestion they should be raised is tone deaf, Jarrod Kerr, Kiwibank chief economist and Alexandra Turcu, economist say.

“The war in the Middle East isn’t over yet. And we don’t know when it will end. And even when it does, it will take months to return to normal.”