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Preview of RBNZ May 2024 Monetary Policy Statement

Persistent inflation pressures will keep the RBNZ on-message and leave the OCR at 5.5%. We think the RBNZ will very likely leave the forward profile for the OCR unchanged from their February forecasts.

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Persistent inflation to keep the champagne stoppered

  • We expect the RBNZ will leave the OCR at 5.5% at its May Monetary Policy Statement.
  • The RBNZ will likely remain comfortable with the forward outlook communicated in the February Monetary Policy Statement. 
  • We don’t see a significant change in the RBNZ’s projections for the OCR – easing still looks like a 2025 affair.
  • Weaker than expected GDP growth and numerous indications of a flat economy should trigger a downward adjustment in the 2024 growth profile.
  • But the inflation outlook remains challenging as a non-tradables driven upward inflation surprise in Q1 2024 likely implies a still elevated near-term inflation outlook. 
  • Market views of OCR easing as early as October are unlikely to find support. 

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