Skip to main content

Housing downturn raises recession risks

With inflation rising even further than we had anticipated, both the RBNZ and the RBA will slam harder on the brakes than most anticipate. We expect policy rates to peak around 3.5% in both countries. With the ongoing housing downturns set to intensify, consumption growth will soften and dwellings investment will plunge. Accordingly, we expect both central banks to start loosening policy next year and have pencilled 50bp of rate cuts by the RBA and 75bp of rate cuts by the RBNZ.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access