Reserve Bank of New Zealand (RBNZ) will deliver its fifth half-point interest rate hike on Wednesday and do the same in November in an attempt to stem the tide of rising inflation, the latest Reuters poll of economists predicted.
Key findings
All 24 economists in the Sept. 26-29 Reuters poll forecast the RBNZ would hike its official cash rate by 50 basis points to 3.50% at its Oct. 5 meeting.
Nearly all economists have brought forward rate hike expectations from last month's poll and a majority, 17 of 22, now expected the OCR to reach 4.00% or above by end-2022, 50 basis points higher than August's poll.
Current poll medians showed rates would remain unchanged at 4.00% until end-2023, not far from the RBNZ's projected terminal rate of 4.10%.
But a strong minority of nearly 40% of economists expected rates to be higher than the predicted peak rate.
Inflation was predicted to remain well above the RBNZ's target range of 1-3% until at least end-2023. It was expected to average 6.5% this year and then slip to 3.5% in 2023, higher than the 6.0% and 2.8% predicted in July.
Economists also cautioned the risks to their inflation projection were skewed more towards faster price growth.
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