Reserve Bank of New Zealand – Economic Outlook, Feb 2025

The main theme of the report concerns the current state and prospects of New Zealand's economy, as well as the monetary policy conducted by the Reserve Bank. Key findings include annual inflation remaining at 2.2% in December 2024 and expected to stay within the MPC's target range of 1 to 3%. Inflation on internationally traded goods remains negative, while inflation on domestic goods continues to decline. Restrictive interest rates continue to dampen demand, with GDP data showing a significant downturn in mid-2024. Economic activity is expected to recover in 2025 due to lower interest rates and income growth in some export sectors. Labor market conditions have softened but are expected to improve with some delay. Uncertainty has increased significantly due to recent changes in international trade policy. The Monetary Policy Committee decided to lower the official cash rate by 50 basis points to 3.75%.