New Zealand central bank says economic recovery picking up

[AUCKLAND] Early indicators suggest the economy had been expanding during the second half of this year and demand had stabilised, Reserve Bank of New Zealand Governor Christian Hawkesby told a parliamentary committee on Thursday.

The RBNZ cut its benchmark official cash rate by 25 basis points to 2.25 per cent on Wednesday, the lowest since mid-2022, but policymakers signalled an end to the easing cycle as the economy showed early signs of picking up.

“We’re not waiting for a recovery; a recovery is happening right at the moment. ... All our indicators are telling us now that the economy expanded through Q3,” Hawkesby said.

Hawkesby said labour market indicators will be the last ones to turn but there are a number of indicators including vacancies, hours worked, hours paid that are starting to turn around.

“Looking to the influence of monetary policy on the labour market, is going to be positive rather than negative,” he said.

Hawkesby said 2026 will have low and falling inflation, and an expanding economy. “It’s a good environment to be stepping into,” he said. REUTERS