Our Australia and New Zealand Chart Pack has been updated with the latest data and our analysis of recent developments.
Central banks in both Australia and New Zealand are likely to retain their hawkish bias in the near term, given that inflation is far from tamed in either country. While we think the RBNZ's tightening cycle is over, we expect RBA to hand down one final 25bp rate hike in November. Although activity has proven somewhat resilient thus far, we doubt it can keep defying economic gravity. Consequently, we still expect both Antipodean economies to fall into recession in H2 2023. As output falls and disinflation gathers pace, we expect central banks to start loosening policy next year. That said, GDP growth will return to potential only in 2025.
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