Finance Minister confirms inflation within target range.
According to the latest figures from Stats NZ, New Zealand's inflation rate has remained steady at 2.5 per cent in the year to March, well within the Reserve Bank's target range of 1-3 per cent. This marks the third consecutive quarter that inflation has been under control, with Finance Minister Nicola Willis stating that high inflation is a thing of the past.
The Government's efforts to reduce public expenditure have contributed to this stabilisation, giving the Reserve Bank room to lower interest rates. As a result, banks are now offering fixed mortgage rates below 5 per cent, and non-tradeable inflation – a measure of domestic demand and supply conditions – continues to fall.
A two percentage point drop in the Official Cash Rate has already resulted in significant savings for households with mortgages. For example, someone with a $500,000 mortgage over 25 years can expect to save around $300 per fortnight on their repayments. Further rate cuts are expected to put even more money in people's pockets and boost business revenues.