Having returned to work after what I hope was an enjoyable break, refreshed and ready to meet whatever challenges may lie ahead, can we afford to be optimistic about the economic climate and business performance as we navigate a new year?
The latest inflation figures released at the end of January show a fall in the Consumer Price Index (CPI) from 5.6% in the September 2023 quarter to 4.7% in the December 2023 quarter, which is much needed good news. However, although inflation is lower, it still isn’t the low inflation rate that the Reserve Bank of New Zealand (RBNZ) is aiming for as their target lies between 1% – 3%.
Consequently, many economists are predicting that the RBNZ will keep the Official Cash Rate (OCR) at its current level of 5.5% in February, as it tries to maintain the downward trend for inflation. Should this be the case, the likelihood is that interest rates will remain high, offering no respite to people paying mortgages and business loans.
There is some hope however that if inflation continues to fall, initiating a reduction in the OCR, then interest rates will follow suit later in the year which would be a positive outcome for us all.
A recent survey by NZIER (New Zealand Institute of Economic Research) saw business confidence rise sharply in the final quarter of 2023, I hope this optimism is well-founded and leads to a successful 2024 for everyone.
In closing, please keep shopping local!
Source: Networker Magazine
Business North Harbour Staff Contacts
Kevin O’Leary – General Manager
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Business North Harbour Office
Telephone: 09 968 2222
Address: Level 1, 322 Rosedale Road, Rosedale
Website: www.businessnh.org.nz
