In the latest economic projections, RBNZ projected that inflation will stay below target for longer then in February MPS. CPI won’t breaks 2% level until 2022. CPI forecasts for 2019 and 2021 were both revised down. On growth, RBNZ sees slower GDP growth in 2019 and 2020. But GDP growth is expected to pick up solidly in 2021 before dipping in 2022.
On the net, RBNZ sees the need for further rate cut with average OCR hitting 1.4% in 2021 before bottoming.
OCR year average (vs Feb projections):
- 2019 at 1.8% (unchanged);
- 2020 at 1.6% (revised down from 1.8%);
- 2021 at 1.4% (revised down from 1.8%);
- 2022 at 1.6% (revised down from 2.2%);
CPI (vs Feb projections):
- 2019 at 1.5% (revised down from 1.6%);
- 2020 at 1.9% (revised up from 1.7%);
- 2021 at 1.9% (revised down from 2.1%);
- 2022 at 2.1% (unchanged).
GDP growth(vs Feb projections):
- 2019 at 2.6% (revised down from 2.8%);
- 2020 at 2.6% (revised down from 2.9%);
- 2021 at 3.1% (revised up from 2.8%);
- 2022 at 2.5% (revised up from 2.3%);
