1
The Inflation Outlook
Monetary Policy Statement, September 2026
This presentation represents the view of the Monetary Policy Committee (MPC), not of any individual member.
The decision – OCR increased to 2.75%
2
• The Committee agreed by consensus to increase the
OCR by 25 basis points to 2.75%
• A gradual removal of monetary stimulus remains
appropriate as inflation returns to 2 percent and the
recovery broadens
• Future policy decisions will depend on incoming
data and the balance of risks to medium-term
inflation
3
Disruptions in the Middle East have led to
significantly higher oil prices
Source: Bloomberg, LSEG.
Dubai oil prices
(daily)
4
Disruptions in the Middle East have led to
significantly higher oil prices
Source: Bloomberg, LSEG.
Dubai oil prices
(daily)
5
Disruptions in the Middle East have led to
significantly higher oil prices
Source: Bloomberg, LSEG.
Dubai oil prices
(daily)
6
Disruptions in the Middle East have led to
significantly higher oil prices
Dubai oil prices
(daily)
Source: Bloomberg, LSEG.
7
We expect that headline inflation peaked in the
June 2026 quarter
Headline inflation
(annual)
Source: Stats NZ, RBNZ estimates.
8
The effects of higher oil prices will linger over
coming quarters…
Source: Stats NZ, RBNZ estimates.
Headline inflation
(annual)
... but indicators of medium-term inflation are
consistent with our target
9
• Most core inflation measures are within the
target band
• Longer-term inflation expectations are close
to 2 percent
• Most short-term inflation expectations
measures have fallen
• Expected wage growth is consistent with
inflation at target
10
The New Zealand economy is recovering
Source: Stats NZ, RBNZ estimates.
Production and potential GDP
(seasonally adjusted)
11
Strong export growth is supporting economic
activity
Source: Stats NZ, RBNZ estimates.
Total exports
(seasonally adjusted)
12
The unemployment rate is projected to decrease
Source: Stats NZ, RBNZ estimates.
Unemployment rate
(unemployed people as a share of the labour force, seasonally adjusted)
13
Unemployment rates are higher in the North
Island than in the South Island
Source: Stats NZ, RBNZ estimates.
Unemployment rate by region
(unemployed people as a share of the labour force, seasonally adjusted)
14
House prices are increasing in the South Island
and decreasing in the North Island
Source: REINZ, RBNZ estimates.
House price index by region
(seasonally adjusted)
15
Investment is improving
Source: Stats NZ, RBNZ estimates.
Private investment
(seasonally adjusted)
16
Consumption growth has been weak, but is
projected to increase gradually
Source: Stats NZ, RBNZ estimates.
Private consumption
(seasonally adjusted)
17
We expect GDP growth to strengthen over the
medium term
Source: Stats NZ, RBNZ estimates.
Contributions to production GDP growth
(annual)
The outlook remains uncertain
18
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OCR increased to 2.75%
Source: RBNZ estimates.
OCR
(quarterly average)
Summary
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• Inflation to return to the 2% target midpoint
• The economic recovery to strengthen and broaden
• Monetary policy is focused on returning inflation to
target while supporting growth and employment
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The New Zealand economy is recovering
Source: Stats NZ, RBNZ estimates.
Production and potential GDP
(seasonally adjusted)
23
Household have been spending less than
their incomes
Source: Stats NZ, RBNZ estimates.
Household sector real net disposable income, consumption, and saving
(seasonally adjusted)