The NZIER Monetary Policy Shadow Board has recommended that the Reserve Bank of New Zealand (RBNZ) continue its easing cycle at the upcoming October policy review, with a majority of members favouring a 25-basis-point cut to the Official Cash Rate (OCR).

The group said spare capacity in the economy allows room for modest stimulus to aid recovery without reigniting inflation. However, opinions within the board were split: several members argued that the weaker-than-expected June-quarter GDP justified a larger 50-basis-point cut, while one member preferred to hold rates, citing the recent uptick in inflation and the lagged effects of earlier easing.

Looking ahead, most members expect the OCR to settle between 2.50% and 2.75% over the next year. Those advocating a cautious stance warned that excessive easing could risk an inflation rebound, while others said further cuts are needed to sustain growth and rebuild momentum in the economy.

—

Statement due at 2pm New Zealand time on 5 October 2025