News about New Zealand

A business survey showed New Zealand's services sector kept expanding in September for a fourth consecutive month, though growth remained weak amid cost pressures and election uncertainty. The BNZ-BusinessNZ Performance of Services Index eased to 50.9 from 51 in August, still above the 50-point line that separates expansion from contraction. New orders (52.6) and inventories (52.3) were the strongest sub-indices, while supplier deliveries (49.4) and employment (49.8) were weak, pointing to a narrow recovery. BusinessNZ CEO Katherine Rich said businesses remained cautious ahead of the general election, while BNZ economist Doug Steel noted services lagged manufacturing.

New Zealand's services sector kept expanding in September for a fourth straight month, though growth remained weak amid cost pressures and election uncertainty. The BNZ-BusinessNZ Performance of Services Index edged down to 50.9 from 51 in August, still above the 50-point line separating expansion from contraction. Businesses remain cautious ahead of the Nov. 7 general election, citing fuel prices, interest rates and cost-of-living pressures. New orders and inventories were the strongest sub-indices, while employment and supplier deliveries were weak, highlighting a narrow recovery. BNZ Senior Economist Doug Steel said the expansion was notable after two years of contraction, but it lagged well behind manufacturing.

Markets price about a 70% chance the Reserve Bank of New Zealand will lift the Official Cash Rate, now 2.75%, on October 28, and a 100% chance by December. ANZ says that if Q3 CPI lands near its 3.7% forecast, an October hike stays on the table given the weaker NZ dollar and higher oil prices since September, with tradeable inflation seen at 4.2% and non-tradeable at 3.5%. Westpac expects the central bank to look past the slight dip in headline inflation, as fuel prices rebounded late in the quarter and inflation for the December quarter could exceed the 4.1% of the June quarter. BNZ believes the bank will keep lifting the cash rate, including at its upcoming October meeting, due to concerns over fuel prices and the weak NZ dollar.

The Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ) has signed a Memorandum of Understanding with public and private sector organisations. The agreement aims to support access to basic transaction services across New Zealand.