BitcoinWorld RBNZ’s Breman: Growth to Be Slightly Slower but Still Expected This Year Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Breman indicated on Tuesday that the nation’s economic growth is expected to be slightly slower than previously forecast, but still positive for the current year. Speaking at a business conference in Auckland, Breman provided a tempered outlook that balances lingering domestic pressures with improving global conditions. Revised Growth Projections Breman noted that recent data points to a moderation in economic activity, particularly in the housing and retail sectors, which have been dampened by elevated interest rates and cautious consumer spending. However, he stressed that the economy is not contracting. “We are seeing a period of slower expansion, not a recession,” Breman said. The RBNZ’s latest forecasts, due in full next month, are expected to show GDP growth in the range of 1.5% to 2.0% for 2025, down from an earlier estimate of around 2.5%. The central bank has maintained a restrictive monetary policy stance to combat inflation, which remains above its 1–3% target band. Breman reiterated that the bank’s decisions will remain data-dependent, with a focus on core inflation trends and labor market tightness. Key Drivers and Risks Several factors are contributing to the softer outlook. High mortgage rates continue to weigh on household budgets, reducing discretionary spending. Meanwhile, business investment has been subdued amid uncertainty over global trade and regulatory changes. On the positive side, net migration remains strong, adding to labor supply and supporting demand in the services sector. Breman highlighted that the global environment is providing some tailwinds, with easing supply chain pressures and a recovery in key export markets like China. However, he cautioned that geopolitical risks and volatile commodity prices could still disrupt the recovery. Implications for Monetary Policy The slower growth trajectory may influence the RBNZ’s rate path. Markets are currently pricing in a potential rate cut in the second half of 2025, though Breman did not signal any imminent shift. “We need to see sustained evidence that inflation is returning to target before considering any easing,” he said. The next Official Cash Rate decision is scheduled for late February. For businesses and households, the message is one of cautious optimism. The economy is expected to avoid a hard landing, but the road to recovery will be gradual. Investors should monitor upcoming GDP data and the RBNZ’s full Monetary Policy Statement for clearer signals. Conclusion Paul Breman’s remarks confirm that the RBNZ sees a modestly weaker growth path for New Zealand in 2025, but not a downturn. The central bank remains focused on inflation control, and any policy easing will depend on concrete data. For readers, this means interest rates are likely to stay higher for longer, with implications for mortgages, savings, and business planning. FAQs Q1: What did RBNZ’s Paul Breman say about New Zealand’s economic growth? A: He said growth will be slightly slower than earlier forecasts but still positive for the current year, with GDP likely expanding between 1.5% and 2.0%. Q2: When will the RBNZ release its full updated forecasts? A: The next full Monetary Policy Statement, including detailed economic projections, is scheduled for release in late February 2025. Q3: Will the RBNZ cut interest rates soon? A: Breman indicated no immediate plans to ease policy. The bank will wait for sustained evidence that inflation is returning to its 1–3% target before considering rate cuts. This post RBNZ’s Breman: Growth to Be Slightly Slower but Still Expected This Year first appeared on BitcoinWorld .
