Economists expect low official cash rate to give economy a boost

Economists expect a low official cash rate to give the economy a boost over the coming year.

NZIER has released its latest quarterly predictions, in which economists said they expected another cash rate cut in September.

The official cash rate (OCR) is currently at 1.5% – a historic low.

Principal economist Christina Leung expected the next rate cut to increase economic activity. NZIER expects annual gross domestic product (GDP) growth to average around 2.6% over the next five years.

It was 3.4% over the previous five.

Westpac chief economist Dominick Stephens said it was possible that the cash rate was already low enough to not require further easing.

He also expected GDP growth to pick up from the second half of this year, hitting a peak of 3.1% over 2020.

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