Political & Economic week ahead: Will the Reserve Bank signal a lowering of the official cash rate?
Rob Hosking gives his in-depth analysis of the big stories to watch out for this week. With special audio feature.
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Hawke’s Bay
Economically, the week will be dominated by one event – the Reserve Bank's first full monetary policy statement for 2016.
The big question hovering over it is what signal governor Graeme Wheeler will give on any further lowering of the official cash rate (OCR) from 2.5% over this year.
Although some economists believe the governor will lower the OCR this Thursday, that is very much a minority view.
More likely is a signal of rate cuts later in the year, most likely from June onward.
What will get more attention is the economic outlook. The monetary policy statement includes a full updated economic forecast and it will be intriguing to see whether the Reserve Bank follows other economic forecasters in revising its GDP expectations upward for New Zealand.
The other big event this week is the first landmark tax case to appear before the Supreme Court for some years. This involves energy generator Trustpower [NZX: TPW] and it goes to the heart of businesses' ability to plan new projects, to claim tax deductions for those plans, and to not have Inland Revenue push back later.
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Mon, 07 Mar 2016
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Political & Economic week ahead: Will the Reserve Bank signal a lowering of the official cash rate?
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