Weekly Economic Commentary

The RBNZ is likely to hold the OCR at 2.25% in its May meeting but signal future hikes as the Iran war drives energy inflation while weakening growth. Westpac expects the first rate increase in September 2026.

Key Takeaways

• 1.The RBNZ is expected to keep the Official Cash Rate (OCR) unchanged at 2.25% this week, but deliver a hawkish signal for future hikes.
• 2.The Iran war has significantly increased energy costs, driving headline inflation projections above 4% for much of 2026.
• 3.New Zealand's 2026 GDP growth outlook has been downgraded from 2.8% to a range of 1.8% to 2.0% due to geopolitical uncertainty.

Table of Contents

• To hold or not to hold, that is the question.
• Key views
• Key data and event outlook
• Chart of the week.
• Fixed versus floating for mortgages.
• Global wrap
• Financial markets wrap
• The week ahead
• Economic and financial forecasts
• Data calendar
• Contact

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