This update from Kiwibank in New Zealand on their outlook
The main points:
- The outlook for the Kiwi economy is deteriorating into a recession. Large parts of the global economy will fall into recession, as central banks hike interest rates to squash inflation. The RBNZ is even more extreme.
- The RBNZ are hell-bent on forcing inflation back within its mandated 1-to-3%yoy target band. And fair enough, their credibility as an inflation-fighter is being tested. They expect the OCR to hit 5.5% in order to achieve the required economic slowdown.
- We think a move beyond 5% is a step too far. What the RBNZ will do (hike to 5.5%), is beyond what we think the RBNZ should do. We place a much larger weight on the global slowdown, higher interest rates are effective, and Kiwi are feeling the pinch now.
Analysts also provide forecasts for the NZD/USD:
Dec 22: NZD/USD to 0.65
Jun 23 0.57
Dec 23 0.55
Jun 24 0.59
Dec 24 0.63
Jun 25 0.67
Dec 25 0.69
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