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New Zealand central bank does not expect recession

City, Town, Urban Creative Commons
The central bank signalled continuing its aggressive tightening policy, which has seen the cash rate rise to 3% in less than a year

Reserve Bank of New Zealand Governor Adrian Orr said on Wednesday that while growth would slow he did not expect a recession, adding that the central bank believed it was on top of inflation, which has hit three-decade highs.

“Through our projection period ahead, while we do not forecast a recession … we do forecast low GDP growth, below (the) potential growth rate,” Orr told a media briefing after the RBNZ hiked interest rates by 50 basis points.

The RBNZ signalled in its policy review it would continue its aggressive tightening, which has seen the cash rate rise by 275 basis points to 3 percent in less than a year.

“We are adamant that we are in a very strong position to be on top of inflation,” Orr added. “As you can see from our projections, we have inflation down back within the target range over the 18-month period, and it’s all slowing inflation from here.”