The Reserve Bank of New Zealand will leave interest rates unchanged on July 9, a majority of economists polled by Reuters expected, with the median forecast showing just one more 25 basis point cut this year compared with two in a May survey.
After one of the most aggressive tightening cycles in its history to tame inflation, the central bank has lowered rates by 225 basis points since August.
That supported an economy that emerged from recession last year. It grew by 0.8% in the January-March quarter, giving policymakers time to consider the next rate cut.
Although inflation eased to 2.5% in the first quarter, within the RBNZ's 1%–3% target range, uncertainty around medium-term price pressures has increased.
With second-quarter inflation data due on July 21, the central bank is expected to hold off on further easing for now.
A majority of economists, 19 of 27, in a June 30-July 3 Reuters poll expected the RBNZ to hold its official cash rate (NZINTR=ECI) at 3.25% on July 9. Eight expected a 25 basis point cut.
All major New Zealand banks - ANZ, ASB, BNZ, Kiwibank and Westpac - forecast no change in rates.
Another 25 basis point cut is due by end-September, according to 16 of 22 economists, with half expecting it at the August meeting.
"The data that has come out since the May monetary policy statement has been pretty mixed," said Wesley Tanuvasa, economist at ASB.
"So pause now, see the inflation expectation data. From there, that can help them navigate whether August is a cut or not. Right now, we've priced in a cut for August," he said.
While there is no majority on where rates will end the year, the median forecast shows 3.00% compared with 2.75% in the May poll.
Inflation is expected to average 2.8% this quarter and stay within the RBNZ's target range through at least the end of 2026, according to the poll. It is forecast to average 2.5% in 2025 and 2.1% in 2026.
New Zealand's economy is expected to grow 1.0% this year and 2.4% in 2026, down from 1.2% and 2.5%, respectively, in an April survey, the poll showed.
(Other stories from the July Reuters global economic poll)
