An economist warns there's no sign of a rapid decrease in the Reserve Bank's official cash rate despite inflation continuing to drop.
Inflation has fallen to 4.7 percent, Statistics NZ said on Wednesday, which was in line with economists' expectations but still above the Reserve Bank's (RBNZ) target of between 1 and 3 percent.
Rising housing costs, including rent, continued to drive inflation but the falling price of food dragged it down, Stats NZ said.
The latest economic forecasts from the RBNZ predict inflation would be at 2.5 percent by the end of this year.
"[We're] seeing the better outcomes we've been hoping for," said Brad Olsen, Infometrics' principal economist.
Olsen, however, said there was nothing in Wednesday's inflation figures "that make me go, 'We need to cut interest rates - desperately, now'".
"But equally, I don't think there's any real reason to up interest rates any further from where we are," he told Newshub.
"We've had a course that we've been trying to get down over time, we're continuing to move along that course - I think really, when we look at the figures, we're comfortable broadly with how inflation is playing out."
But Olsen cautioned there were still several economic risks.
"Shipping rates... have increased quite considerably at the start of 2024 but, hopefully, looking at these numbers for a lot of Kiwi households, they'll be seeing increases still but not nearly as large of an increase as they've seen in the past."
Olsen believed the RBNZ would cut its official cash rate this year - but warned borrowers not to get ahead of themselves.
"The numbers that we're seeing at the moment are not enough for the Reserve Bank to very quickly start to go on massive rates cuts," he said.
"We're still seeing too high inflation - particularly that domestically based inflation - is quite a bit away from where we'd want to see it."
But the good news for mortgage holders: "If we continue on this pathway, as inflation moderates through the year, Infometrics is now expecting that we could see the official cash rate cut for the first time in August this year," OIsen said.
