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Straits Times
3 days ago
- Business
- Straits Times
New Zealand spending slowdown adds to signs of cooling economy
Sign up now: Get ST's newsletters delivered to your inbox Sluggish consumer spending mirrors recent data showing the services and manufacturing industries remained in contraction in the month of June. New Zealand retail card spending fell in the second quarter, adding to signs that an initial spurt of economic growth early this year has all but disappeared. Purchases on debit and credit cards at retail stores fell 0.7 per cent from the first quarter, when it was unchanged, Statistics New Zealand said July 14 in Wellington. The value of spending is lower than in the year-earlier quarter when the economy was entering a deep depression. Sluggish consumer spending mirrors recent data showing the services and manufacturing industries remained in contraction in the month of June. The slowdown in domestic demand suggests gross domestic product barely expanded in the second quarter after 0.8 per cent growth in the three months through March. Sentiment is being challenged by a soft housing market, rising unemployment and a high cost of living. While home-loan interest rates are falling, many borrowers on fixed-terms are yet to get the full benefit until their mortgages roll over later this year, and are watching their budgets closely. July 14's report showed spending on discretionary items such as hospitality, apparel, motor vehicles and durable goods such as appliances fell in the quarter. Purchases of consumable items such as groceries gained. Household confidence may also be dented by the Reserve Bank's decision last week to keep the Official Cash Rate unchanged at 3.25 per cent, although policymakers did signal further cuts are expected. At the same time, business confidence has been buffeted by uncertainty over US tariff policies and their impact on global economic growth. Top stories Swipe. Select. Stay informed. Business Singapore's economy continues to expand in Q2 despite US tariff uncertainty: Advance estimate Singapore What's in a name? Local author traces the evolution of Singaporean Chinese names Business From wellness zone to neurodivergent room: How companies are creating inviting, inclusive offices Singapore Govt will continue to support families, including growing group of seniors: PM Wong at PCF Family Day Singapore Swift action needed to stop vaping's slide from health risk to drug epidemic Singapore Art by Pathlight students to be displayed along Singapore River Opinion Hong Kong's past is disappearing, one icon at a time Sport Jannik Sinner dethrones Carlos Alcaraz to capture maiden Wimbledon crown Earlier July 14, Business New Zealand and Bank of New Zealand reported that the services industry contracted for a fifth straight month while the organizations last week said manufacturing had shrunk for a second consecutive month. 'The time line for New Zealand's long-awaited economic recovery just keeps getting pushed further and further out,' said Mr Doug Steel, senior economist at BNZ in Wellington. He expects GDP contracted in the second quarter. BLOOMBERG
Business Times
3 days ago
- Business
- Business Times
New Zealand spending slowdown adds to signs of cooling economy
[WELLINGTON] New Zealand retail card spending fell in the second quarter, adding to signs that an initial spurt of economic growth early this year has all but disappeared. Purchases on debit and credit cards at retail stores fell 0.7 per cent from the first quarter, when it was unchanged, Statistics New Zealand said on Monday (Jul 14) in Wellington. The value of spending is lower than in the year-earlier quarter when the economy was entering a deep depression. Sluggish consumer spending mirrors recent data showing the services and manufacturing industries remained in contraction in the month of June. The slowdown in domestic demand suggests gross domestic product barely expanded in the second quarter after 0.8 per cent growth in the three months to March. Sentiment is being challenged by a soft housing market, rising unemployment and a high cost of living. While home-loan interest rates are falling, many borrowers on fixed terms are yet to get the full benefit until their mortgages roll over later this year, and are watching their budgets closely. Today's report showed spending on discretionary items such as hospitality, apparel, motor vehicles and durable goods such as appliances fell in the quarter. Purchases of consumable items such as groceries gained. Household confidence may also be dented by the Reserve Bank's decision last week to keep the Official Cash Rate unchanged at 3.25 per cent, although policymakers did signal further cuts are expected. At the same time, business confidence has been buffeted by uncertainty over US tariff policies and their impact on global economic growth. Earlier Monday, Business New Zealand and Bank of New Zealand reported that the services industry contracted for a fifth straight month while the organisations last week said manufacturing had shrunk for a second consecutive month. 'The timeline for New Zealand's long-awaited economic recovery just keeps getting pushed further and further out,' said Doug Steel, senior economist at BNZ in Wellington. He expects GDP contracted in the second quarter. BLOOMBERG
NZ Herald
09-07-2025
- Business
- NZ Herald
NZ sharemarket dips as Reserve Bank holds OCR steady
The New Zealand sharemarket on Wednesday lost most of the gains it made yesterday, while the Reserve Bank aligned with other global counterparts in holding New Zealand's Official Cash Rate. The Reserve Bank decided to leave the Official Cash Rate (OCR) on hold at 3.25%, as widely expected. On the
1News
09-07-2025
- Business
- 1News
OCR held at 3.25% by Reserve Bank
The Official Cash Rate (OCR) has been held at 3.25%. It is the first time the OCR has not received a cut since July 2024, marking the end of six consecutive cuts. The decision to hold the OCR at its current rate by the Reserve Bank of New Zealand (RBNZ) was widely expected by economists. Last week, Infometrics economist Brad Olsen told 1News expectations in the market are for no cut to the OCR in July 'as the RBNZ takes a pause'. He did however add the market is expecting 'one further cut', which would be 'pencilled in at some point before the end of 2025'. ADVERTISEMENT Today, RBNZ said annual consumers price inflation will likely increase towards the top of the Monetary Policy Committee's one-to-three percent target band over mid-2025. "However, with spare productive capacity in the economy and declining domestic inflation pressures, headline inflation is expected to remain in the band and return to around 2% by early 2026. "Elevated export prices and lower interest rates are supporting a recovery in the New Zealand economy. However, heightened global policy uncertainty and tariffs are expected to reduce global economic growth. This will likely slow the pace of New Zealand's economic recovery, reducing inflation pressures." Finance Minister Nicola Willis said more Kiwis will benefit when they re-fix their mortgage this year, and pointed to the 2.25% point reduction in the OCR since August 2024. Finance Minister Nicola Willis. (Source: Breakfast) "Lower interest rates free-up household budgets for spending elsewhere and they ease the path for those wishing to enter the housing market. "They also provide relief to interest-rate sensitive sectors of the economy, including building and construction, with lower interest rates often providing a kick-start for big new projects." ADVERTISEMENT Willis to meet Fonterra boss over dairy prices The Finance Minster signalled she would meet with the Fonterra chief executive "in the next little while" to talk about "what we can do to make sure New Zealanders have affordable cheese, milk and butter". "What I worry about is when I see that it appears you can get cheaper milk and butter in other countries than here, and as I say I'm going to be talking to Fonterra about what's behind that, because I'm on the side of New Zealanders who say 'well that doesn't seem quite right.'" Willis added she was "interested" to see how much of the dairy prices in New Zealand were due to "supermarket competition" and "prices Fonterra are passing through". RBNZ outlines path for further cuts RBNZ added the current economic outlooks remains "highly uncertain". "Further data on the speed of New Zealand's economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the Official Cash Rate. ADVERTISEMENT "If medium-term inflation pressures continue to ease as projected, the Committee expects to lower the Official Cash Rate further." Are mortgage rates expected to drop? Olsen told 1News banks are likely to tweak their rates slightly to remain competitive, but large cuts to interest rates have largely run their course. 'Further OCR cuts or global interest rate declines would be needed to see any more substantial easing in rates.'
The Advertiser
09-07-2025
- Business
- The Advertiser
NZ Reserve Bank follows Australia and holds rate steady
New Zealand's central bank has ended a run of six consecutive cuts, holding the official cash rate at 3.25 per cent. In a decision announced on Wednesday, Reserve Bank of New Zealand (RBNZ) followed Australia's lead from a day earlier, opting to take stock given the uncertain economic outlook. The decision is seen as not a rate cut denied - just a rate cut delayed. "If medium-term inflation pressures continue to ease as projected, the (RBNZ) expects to lower the Official Cash Rate further," governor Christian Hawkesby said. Like Australia, headline inflation in New Zealand is back inside the RBNZ's target band, last measured at 2.5 per cent in April. However, New Zealand has taken a decidedly different economic path in the post-pandemic tumult, falling into a deep recession in 2024. The RBNZ cut from a high of 5.5 per cent to current levels in the past six meetings. Mr Hawkesby said the RBNZ's monetary policy committee was split on just how strongly the Kiwi economy was rebounding. "Some members highlighted that prolonged economic uncertainty might induce further precautionary behaviour by households and firms," he said. Such actions risk becoming mutually reinforcing and weigh on aggregate demand, slowing the economic recovery. "In contrast, other members emphasised stronger household consumption and business investment in the March quarter, along with higher surveyed investment intentions in the June quarter, as possible signals of a recovery in interest rate sensitive parts of the economy." New Zealand's central bank has ended a run of six consecutive cuts, holding the official cash rate at 3.25 per cent. In a decision announced on Wednesday, Reserve Bank of New Zealand (RBNZ) followed Australia's lead from a day earlier, opting to take stock given the uncertain economic outlook. The decision is seen as not a rate cut denied - just a rate cut delayed. "If medium-term inflation pressures continue to ease as projected, the (RBNZ) expects to lower the Official Cash Rate further," governor Christian Hawkesby said. Like Australia, headline inflation in New Zealand is back inside the RBNZ's target band, last measured at 2.5 per cent in April. However, New Zealand has taken a decidedly different economic path in the post-pandemic tumult, falling into a deep recession in 2024. The RBNZ cut from a high of 5.5 per cent to current levels in the past six meetings. Mr Hawkesby said the RBNZ's monetary policy committee was split on just how strongly the Kiwi economy was rebounding. "Some members highlighted that prolonged economic uncertainty might induce further precautionary behaviour by households and firms," he said. Such actions risk becoming mutually reinforcing and weigh on aggregate demand, slowing the economic recovery. "In contrast, other members emphasised stronger household consumption and business investment in the March quarter, along with higher surveyed investment intentions in the June quarter, as possible signals of a recovery in interest rate sensitive parts of the economy." New Zealand's central bank has ended a run of six consecutive cuts, holding the official cash rate at 3.25 per cent. In a decision announced on Wednesday, Reserve Bank of New Zealand (RBNZ) followed Australia's lead from a day earlier, opting to take stock given the uncertain economic outlook. The decision is seen as not a rate cut denied - just a rate cut delayed. "If medium-term inflation pressures continue to ease as projected, the (RBNZ) expects to lower the Official Cash Rate further," governor Christian Hawkesby said. Like Australia, headline inflation in New Zealand is back inside the RBNZ's target band, last measured at 2.5 per cent in April. However, New Zealand has taken a decidedly different economic path in the post-pandemic tumult, falling into a deep recession in 2024. The RBNZ cut from a high of 5.5 per cent to current levels in the past six meetings. Mr Hawkesby said the RBNZ's monetary policy committee was split on just how strongly the Kiwi economy was rebounding. "Some members highlighted that prolonged economic uncertainty might induce further precautionary behaviour by households and firms," he said. Such actions risk becoming mutually reinforcing and weigh on aggregate demand, slowing the economic recovery. "In contrast, other members emphasised stronger household consumption and business investment in the March quarter, along with higher surveyed investment intentions in the June quarter, as possible signals of a recovery in interest rate sensitive parts of the economy." New Zealand's central bank has ended a run of six consecutive cuts, holding the official cash rate at 3.25 per cent. In a decision announced on Wednesday, Reserve Bank of New Zealand (RBNZ) followed Australia's lead from a day earlier, opting to take stock given the uncertain economic outlook. The decision is seen as not a rate cut denied - just a rate cut delayed. "If medium-term inflation pressures continue to ease as projected, the (RBNZ) expects to lower the Official Cash Rate further," governor Christian Hawkesby said. Like Australia, headline inflation in New Zealand is back inside the RBNZ's target band, last measured at 2.5 per cent in April. However, New Zealand has taken a decidedly different economic path in the post-pandemic tumult, falling into a deep recession in 2024. The RBNZ cut from a high of 5.5 per cent to current levels in the past six meetings. Mr Hawkesby said the RBNZ's monetary policy committee was split on just how strongly the Kiwi economy was rebounding. "Some members highlighted that prolonged economic uncertainty might induce further precautionary behaviour by households and firms," he said. Such actions risk becoming mutually reinforcing and weigh on aggregate demand, slowing the economic recovery. "In contrast, other members emphasised stronger household consumption and business investment in the March quarter, along with higher surveyed investment intentions in the June quarter, as possible signals of a recovery in interest rate sensitive parts of the economy."
