Interest rate rises may be needed by the end of next year

And Infometrics is forecasting the central bank to starting lifting the OCR  from 2.25% to 3% from December next year to April 2027.

While Infometrics is expecting the RBNZ to cut the official cash rate to 2.25% next month as it tries to boost consumer confidence and spending activity, chief forecaster Gareth Kiernan says, however, the full effects of this stimulus will not hit the economy until mid to late next year, and a new round of increasing interest rates is likely to be needed at the end of 2026 to get interest rates back to neutral.

He says by the time of effects of the stimulus are felt economic growth is likely to have already gathered sufficient momentum from strong export incomes and previous interest rate cuts.

“Economic growth will have accelerated to 2.3% a year by early 2027, with per capita growth comfortably above the 1.4% a year average recorded during the 2010s.”