RBNZ Governor Adrian Orr told Bloomberg TV earlier today, “We know we have to slow the economy. We knew we had to be 3% plus (on interest rates) to begin that slowing journey and now we’re in a much more comfortable position.”
“We think there’ll be least another couple of rate hikes, but then we hope to be in a position where we can be data driven,” he added.
As about the risks of recession, Orr said, “Our core view is no, that we won’t see technical recession. There’s quite a reasonable bounce back in economic activity.”
“Our outlook is for almost flat real consumption so for us to see retail sales come off like that, it’s not a surprise,” Orr said. “It’s a good signal that that monetary policy is biting and we’re doing our work.”
“Consumers will be taking a significant part of the brunt of the slowdown because, we’re an open trading economy. Our monetary policy mostly bites on domestic spending.” But, while “slower growth is a necessary position. It doesn’t have to be negative growth.”