{"id":107906,"date":"2025-10-08T03:46:10","date_gmt":"2025-10-08T03:46:10","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/107906\/"},"modified":"2025-10-08T03:46:10","modified_gmt":"2025-10-08T03:46:10","slug":"new-zealand-delivers-outsized-cut-in-bid-to-boost-growth","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/107906\/","title":{"rendered":"New Zealand delivers outsized cut in bid to boost growth"},"content":{"rendered":"

The Reserve Bank of New Zealand (RBNZ) building in Wellington, New Zealand, on Wednesday, Feb. 22, 2023.<\/p>\n

Mark Coote | Bloomberg | Getty Images<\/p>\n

New Zealand’s central bank on Wednesday cut benchmark interest rates by 50 basis points to 2.5%, bringing the policy rate to its lowest level since July 2022 as growth worries loom.<\/p>\n

The cut to the overnight cash rate was larger than the 25 basis points expected by economists polled by Reuters.<\/p>\n

In its statement<\/a>, the Reserve Bank of New Zealand said inflation was likely to return to its 2% target by the first half of next year, while pointing to weak economic activity in the middle of 2025, warranting a sharper rate cut.<\/p>\n

“Slow growth in disposable incomes and house prices continue to weigh on economic activity, but lower interest rates are supporting a recovery in consumption,” the bank said.<\/p>\n

New Zealand’s GDP<\/a> contracted more than expected in the second quarter, declining 1.1% year on year compared to the 0.9% drop estimated by economists polled by Reuters.<\/p>\n

“In part, this reflects domestic constraints on the supply of goods and services in some industries, and the impact of global economic policy uncertainty.”<\/p>\n

The RBNZ also discussed the impact of trade restrictions and tariffs, and said that global trade volumes and economic activity had proven resilient so far.<\/p>\n

Growth forecasts for 2025 have improved for New Zealand’s trading partners, particularly for China, Taiwan, and some other Asian economies, although growth is expected to slow in 2026, RBNZ said.<\/p>\n

The World Bank on Tuesday raised its 2025 growth forecast<\/a> for China as part of an overall boost in projections for East Asia and the Pacific. The World Bank now projects China’s economy to expand by 4.8%, compared with 4% predicted in April.<\/p>\n

On the home front, domestic inflationary pressures have continued to moderate, giving RBNZ more confidence that inflationary pressures are contained, the bank said.<\/p>\n

Headline inflation came in at 2.7% for the second quarter, near the top of the RBNZ’s target band of 1%-3%.<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank of New Zealand (RBNZ) building in Wellington, New Zealand, on Wednesday, Feb. 22, 2023. Mark…\n","protected":false},"author":2,"featured_media":107907,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[4055,79,207,12388,179,18,19,17],"class_list":{"0":"post-107906","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-asia-economy","9":"tag-business","10":"tag-business-news","11":"tag-central-banking","12":"tag-economy","13":"tag-eire","14":"tag-ie","15":"tag-ireland"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/107906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=107906"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/107906\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/107907"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=107906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=107906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=107906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}