New Zealand to maintain budget discipline

We’re inclined to take Prime Minister Hipkins at his word that the New Zealand government will hand down a fiscally responsible budget next week. We expect government priorities, including cost-of-living relief and cyclone-related reconstruction, to be funded in large part through spending reprioritisation. Elsewhere, newly unveiled RBA staff analysis suggests that monetary policy in Australia is not particularly restrictive. Nonetheless, given the Bank’s desire to keep the economy on an even keel, we think its tightening cycle is probably at an end.