Despite the year starting off with renewed hope that the financial struggles that many people were facing would become a thing of the past, a large number of businesses and households are still struggling to make ends meet. There have, however, been some positive signs with the Reserve Bank of New Zealand (RBNZ) cutting the Official Cash Rate (OCR) on consecutive occasions and the Consumer Price Index (CPI), which measures inflation, remaining within the RBNZ’s target of between 1 and 3 percent.

These positive moves by the RBNZ have prompted the banks to reduce their interest rates, which is obviously good news for some whose mortgage payments have come down, helping to ease the financial burden. For others who have to wait until their fixed-term mortgages end before they can enjoy the benefit of lower interest rates, at least there’s some relief on the way.
Unfortunately, mixed in with this positivity, there is some negativity which is causing people to remain cautious about their spending. The ongoing dialogue out of America regarding tariffs has created global economic uncertainty which is keeping our economists guessing as to what the effects will be on the New Zealand economy, but it has prompted most to predict that this year the pace of economic growth is expected to be modest. There are also divided opinions on how the RBNZ will continue to manage the OCR in response to this economic uncertainty. With unemployment still on the increase and the latest statistics available from Centrix showing that the number of company liquidations in the year to April was up 30% year on year, to 2612, with the construction, property and hospitality sectors all significantly affected, we’re not out of the woods yet.
Additionally, we’re all about to see a sharp increase in our power bills and increases of 5.8% in our Council rates and 7.2% in our water rates, all of which will again slow down any increase in consumer spending for many businesses. Prior to the recent Budget delivered by Finance Minister, Hon. Nicola Willis, she and the Prime Minister both indicated that the focus of the Budget was to encourage economic growth and reduce the hardship of the ongoing cost-of-living crisis which has been hurting New Zealanders for too long. I sincerely hope that these outcomes are achieved, albeit likely to take some time, so that the ongoing financial pressures that many are facing do genuinely become a thing of the past as people hoped.
Thank you for your continued support of our local businesses. Please continue with that support as we embark on the next stage of our economic recovery journey.

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