Core Points - The Reserve Bank of New Zealand (RBNZ) cut benchmark interest rates by 50 basis points to 2.5%, the lowest since July 2022, due to growth concerns [1] - RBNZ expects inflation to return to its 2% target by the first half of next year, while weak economic activity is anticipated in mid-2025 [2] - New Zealand's GDP contracted by 1.1% year on year in the second quarter, worse than the 0.9% drop expected, attributed to domestic supply constraints and global economic uncertainty [3] - Growth forecasts for New Zealand's trading partners, especially China and Taiwan, have improved, with the World Bank projecting China's economy to grow by 4.8% in 2025 [4] - Domestic inflationary pressures are moderating, with headline inflation at 2.7% for the second quarter, near the RBNZ's target band of 1%-3% [5]
New Zealand delivers outsized cut, bringing policy rate to over 3-year low in bid to boost growth
CNBC·2025-10-08 02:55