According to the Herald’s Mood of the Boardroom survey, 78% of business leaders believe the official cash rate (OCR) should keep declining, while only 11% oppose additional cuts and another 11% remain uncertain.
The OCR was last lowered by 25 basis points to 3% in August of this year.
Since August last year, the OCR has been steadily declining, with several cuts implemented and the possibility of additional reductions before the year ends.
“It is critical if NZ is going to get moving again that interest rates come down, and much faster than the current plan,” said one business leader.
“2.50% to get the economy firing again,” another business leader added.
Several contended that cuts would only be effective if accompanied by increased bank lending support and other government measures to alleviate cost pressures.
However, some called for caution. One respondent noted that rate cuts alone do not appear to be making a notable impact and emphasised that long-term stability is just as important as short-term relief.
Another respondent observed that the OCR is currently neutral. While weak growth suggests further cuts, there also appears to be ongoing pricing pressure.