The Reserve Bank of New Zealand have released a 'Summary Record of Meeting'.
Highlights (bolding mine):
- outlook for the economy has softened relative to the projections in the May 2019 Statement
- inflation remains slightly below the mid-point
- employment is broadly at its maximum sustainable level
- The Committee agreed that a lower OCR may be needed to meet its objectives, given further deterioration in the outlook for trading-partner growth and subdued domestic growth
- Relative to the May Statement, the Committee agreed that the risks to achieving its consumer price inflation and maximum sustainable employment objectives are tilted to the downside.
- global economic growth had continued to slow
- ongoing weakening in global trade activity
- A drawn out period of tension could continue to suppress global business confidence and reduce growth
- members noted in particular the dampening effect of uncertainty on business investment
- Some members noted that lower commodity prices and upward pressure on the New Zealand dollar could see imported inflation remain soft.
- domestic GDP growth had held up more than projected in the March 2019 quarter
- construction strong and services weak
- two largely offsetting developments affecting the outlook for domestic growth: softer house price inflation and additional fiscal stimulus.
- continuing absence of wage pressure could indicate that there is still spare capacity in the labour market
- The members agreed that more support from monetary policy was likely to be necessary.The Committee discussed the merits of lowering the OCR at this meeting. However, the Committee reached a consensus to hold the OCR at 1.5 percent. They noted a lower OCR may be needed over time.
