Business confidence may be down but that's unlikely to change the Reserve Bank's mind and prompt a cut in interest rates, economists say.
The Reserve Bank of New Zealand (RBNZ) will release its decision at 2pm on Wednesday but New Zealand markets believe the Official Cash Rate (OCR) will be left at 5.5 percent.
Kiwibank says the RBNZ is keeping the OCR unchanged to beat inflation back to 2 percent.
While the higher rates have hurt Kiwi households and businesses, "if inflation drops back to target and unemployment rises to just 5 percent, that would be "soft landing nirvana",' the bank says.
The latest NZIER survey of businesses shows slumping confidence with a quarter expecting the economy to worsen over the coming months.
When looking at their own trading activity, firms were also reporting a decline in activity over the March quarter.
The building sector is the most downbeat with 54 percent of companies expecting worse conditions, while a quarter of retailers are feeling pessimistic.
NZIER also said with half of mortgages due for repricing over the coming year many households are likely to rein in spending in the face of significantly higher mortgage repayments.
"Higher interest rates look to have their intended impact on dampening demand and reducing inflation pressures."
Westpac says New Zealand rates markets price in a 95 percent chance of a cut by August, but it thinks the Reserve Bank will be looking for more reassurance that inflation is slowing from the upcoming Consumer Price Index release on April 17.
In an economic note, ASB agrees the economic picture for 2024 looks weak but any OCR cuts before November still look unlikely.
