The dangers of basking in good economic news

(Image: Getty)

Mon, 26 Aug 2024

New Zealand would never get away with a soft landing in the disinflation battle without decent productivity growth. The August economic projections by the Reserve Bank of NZ (RBNZ) showed the reality: a real recession deep enough to break [most] firms' pricing power and a weakening labour market to curb wage inflation, meaning a standard of living decline for households. The RBNZ has cut interest rates with the weakest growth trajectory among peers, but inflation is aligned with those that have held rates. They are placing faith...

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