News – AU – ASB is already forecasting an increase in the official cash rate in August 2022


Better than expected, economic conditions could lead to a 12 month hike in interest rates

The ASB bank forecasts that the Reserve Bank (RBNZ) will begin to raise the official key rate from its current level of 025 percent as early as August next year to 125 percent in 2024

The RBNZ has its first monetary policy meeting this Wednesday at which the key rate is expected to remain stable

His chief economist Nick Tuffley said the Reserve Bank will not raise interest rates until New Zealand reopens its borders

“Right now we have a fair section of the economy that is doing pretty well, but we need to remember that the continued closure of the border is damaging our tourism sector and certain regions like Queenstown

“It also affects the income we’ve made from international students who came here to study. So really, by the time the border opens and some people flock to these sectors, we will be at our full potential Can’t get it to the full, “said Tuffley

The RBNZ wants to be confident that the economy is warming, pressures on labor market capacity mount and inflation is above 2 percent, he added

He said inflation is likely to return to “fairly normal levels” soon and should “support the economy” for several years

Despite a severe pandemic, Tuffley is confident the country’s economy “will be one of the first to see the sun rise” “

after the eclipse in Covid

“The economy has been in a surprisingly good position, given all that has happened, and while it has its challenges, we are increasingly looking for an economy that will”need less support it gets right now,” he said

The summer shortage of overseas visitors will cost the country up to 6 percent of GDP and cause the economy to shrink by 0 percent in the six months to March, according to Westpac Bank projections

Official Interest Rate, ASB Bank, Central Bank, Forecast, Monetary Policy, Reserve Bank of New Zealand

News – AU – ASB is already forecasting an increase in the official interest rate in August 2022