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In a statement this afternoon the central bank said employment remains around its maximum sustainable level while inflation remains below the 2% target mid-point but within the bank's target range.
"Economic growth continued to slow in mid-2019 reflecting weak business investment and soft household spending," the bank said, adding that it expected economic growth to remain subdued over the remainder of the calendar year.
"Trading-partner growth has also slowed. Growth in global trade and manufacturing is weak and uncertainty remains high, dampening global business investment. However, New Zealand’s export commodity prices have been robust, underpinning a positive terms of trade," it said.
The lower New Zealand dollar exchange rate this year is also providing a useful additional offset to the weaker global economic environment.
"Domestic economic activity is expected to increase during 2020 supported by low interest rates, higher wage growth, and increased government spending and investment. The low level of the OCR has flowed through to lower lending rates more generally, which support spending and investment."
The Reserve Bank said that interest rates will need to remain at low levels for a prolonged period to ensure inflation reaches the mid-point of its target range with employment around its maximum sustainable level.
"We are committed to achieving our inflation and employment objectives and will add further monetary stimulus if needed," it added