New Zealand maintains interest rate at 5.5% despite economic slowdown

Fiscal Policy Committee Central Bank of New Zealand It agreed this Wednesday to maintain the official interest rate at 5.5%, considering that higher rates are still necessary to control prices.

“He Interest rate should be kept at a controlled level to ensure inflation A target range of 1% to 3% to support annual returns and maximum sustainable employment,” the company stressed in a statement.

He Central Bank of New Zealand It pointed out that interest rates are restraining economic activity and reducing inflationary pressure “as expected”.

“Demand growth in the economy continues to slow. “While GDP growth in the June quarter was higher than expected, growth prospects remain moderate,” the bank explained.

“From this Monetary conditions will be restrained and growth is expected The agency argues in its report. The central bank recalls that, globally, economic growth has been below trend and inflation has declined for most of the New Zealand economy's trading partners.

As indicated by the Central Bank Core inflation also declined, “but to a lesser extent.” It also notes that weakening global demand is putting downward pressure on export volumes and prices. “Except for oil, global import prices have fallen,” he says.

However, while the imbalance between supply and demand in the New Zealand economy continues to moderate, “the longer term calls for moderation in activity,” the agency said. To reduce inflationary pressures.

“There is a short-term riskActivity and inflation are not slowing down as much as needed. “In the medium term, a further slowdown in global economic demand, particularly in China, will weigh heavily on commodity prices and New Zealand's export earnings,” the company notes.