ANZ on the outlook for the RBNZ - still expect negative cash rate but risks more balanced
From ANZ in NZ weekly outlook, a snippet on where they see the Reserve Bank of New Zealand heading:
- For the RBNZ, the outlook is looking a little more positive than was included in their August MPS forecasts, but downside risks remain.
- We expect that the RBNZ will drop the OCR 50bps in April next year, but risks around this outlook are looking more balanced, rather than firmly to the downside.
ANZ economists on their economic outlook, in brief:
- still expect that the economy will face challenges in coming quarters, a buoyant housing market and less pessimistic firms will have a cushioning effect on employment and spending, partially offsetting some of the headwinds ahead
- We now see GDP bouncing back a little bit more strongly through the second half of this year. The unemployment rate is expected to rise a bit more slowly than previously assumed, with activity a little stronger, the wage subsidy delaying job losses, and effects of the closed border not evident just yet
- A serious test for the economy lies ahead though, with a softer growth pulse expected to be evident from the first half of 2021 onwards.