NZIER sees very slight bias towards tightening

New Zealand Institute of Economic Research (NZIER) shadow board offer some recommendations on the upcoming RBNZ monetary policy due out on Thursday.

 Key Points:

Continues to recommend the Reserve Bank leave the Official Cash Rate on hold

Shadow Board continues to see both upside and downside risks to the interest rate outlook

Very slight bias towards tightening

John Ballingall, Deputy Chief Executive at NZIER, noted: "Despite softer inflation and growth earlier this year, the domestic growth outlook remains positive. Rural profitability continues to improve, while consumer confidence is high. Meanwhile, strong migration-led population growth continues to boost demand in many sectors, particularly construction"

"Inflation has eased more recently, with inflationary pressures largely contained in capacity constrained sectors such as construction. With little risk of an acceleration in inflation, and shortterm uncertainty going into the General Election, there remains little urgency to lift the OCR,” John added.