Inflation and rising interest rates remain key headwinds for the economy - Quarterly Predictions, December 2022

Inflation pressures remain intense in the New Zealand economy, over a year from when the Reserve Bank of New Zealand first started raising the Official Cash Rate (OCR) in this cycle. Households and businesses face a perfect storm of high inflation and rising interest rates as central banks around the world tighten monetary policy to dampen demand to bring inflation back towards their target bands. These pressures will weigh on the economic recovery over the coming years.