Big consumer discounts could come around by the end of the year for Kiwis, says economist Cameron Bagrie.
New Zealand has, since 2021, been grappling with inflationary pressure, but Bagrie said businesses were starting to struggle with demand.
"People are just not walking through the door and actually buying your stuff... and that's a different dynamic," he told AM on Tuesday.
"We're now starting to see the job losses; we're starting to see... big pressure on profits and, when you start to see those things come together, guess what? You can't pass on price increases - and that's a story for the back half of this year when you're going to see discounting."
While domestic inflation in New Zealand remained elevated, Bagrie said the "disinflation" process would continue throughout the year.
He said that would result in business being "sharper with the pen".
"But what we're also seeing... there are a whole lot of areas that are non-economically sensitive - these are things such as rates, insurance [and] energy - they're still pushing up," Bagrie noted.
"So, we're seeing a real big clash between the economically sensitive parts of the economy - your construction [and] your retailing and they're going to start to discount - versus those non-economically sensitive parts which are still going to add a bit to the inflation process."
Bagrie's comments come ahead of gross domestic product (GDP) figures being released on Thursday, expected to show flat or negative economic growth for the March quarter.
"The real number to keep an eye on is GDP per capita... and that's likely to be down about 3 percent on a year ago," Bagrie added. "That's a very big contraction per-head."
