New Zealand risks facing a shallow recession, so the rates need to be raised

New Zealand will probably enter a small recession, so the interest rate should continue growing to fight inflation. Such an opinion has appeared among the monetary authorities of the central bank. Also, there was an assumption that it was too early to tighten the policy. 

A central bank Head’s Assistant Karen Silk said in an interview that the bank will monitor the large amounts of data. Information about expenditures and investments in business and housing will also be checked. 

Meeting of the central bank dedicated to the increase in rates will occur in February, and the data of this monitoring will be considered when making a decision. The information about inflation in the fourth quarter will be considered too. This information will be released on February 25.

According to Silk, first, it is necessary to see the inflation data for the bank to change its strategy or reduce the rate growth rate. The second condition is the decrease in inflation expectations.