NZ: Clear risk of succumbing to a period of policy paralysis - TDS

The NZ election may be out of the way but the National Party is likely to serve as a thorn in the Labour – NZ First and Greens coalition and while the Labour party can bask in the honeymoon period, should the passage of time reveal cracks in the coalition, there is a clear risk that NZ could succumb to a period of policy paralysis, explains the research team at TDS.

Key Quotes

“As for the RBNZ, question marks remain over the timing and the announcement of who will be the Grant Spencer’s successor at the RBNZ. In addition, it remains unclear what form the addition of full employment will take in the RBNZ’s new broader mandate. This uncertainty could imply the cash rate remains on hold for longer, a clear risk to TD’s view for the RBNZ hike cycle to begin in May next year.”