Activity has slowed to a standstill in both countries. Although output growth should gather momentum going forward, it will remain below its pre-pandemic average. However, with underlying inflation still running well above target, central banks will be wary about taking their foot off the brakes. We think the RBNZ will cut rates only in Q4 2024 and we’re pushing back our forecast for the first RBA rate cut from Q1 to Q2 next year.
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