New Zealand's tanking economy has pushed the central bank into a second-consecutive double-strength 50 basis point interest rate cut.
And Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr isn't done, saying economic conditions are so poor he will cut again early next year.
The RBNZ believes New Zealand is in the midst of another technical recession.
The economy contracted by 0.2 per cent in the June quarter, with the RBNZ tipping a further 0.2 per cent contraction in the September quarter will be booked when figures are released next month.
The economic gloom prompted Wednesday's cut from 4.75 per cent to 4.25 per cent.
"Economic activity in New Zealand remains subdued and output continues to be below its potential," Mr Orr said.
"If economic conditions continue to evolve as projected, the (RBNZ) expects to be able to lower the OCR further early next year."
The 50bps drop was widely expected by economists, with some believing it may have cut by even 75bps.
ABS chief economist Nick Tuffley said new tracking showed the OCR would dip below four per cent in the first half of next year.
"From here we expect the RBNZ will slow the pace of easing to 25bp moves in 2025, but the risk is a further 50bp cut," he said.
NZ has been on an economic roller coaster ride through the pandemic.
First, it scored top marks for eliminating COVID-19 and avoiding an initial shock.
However, supply chain shocks and the combination of government-boosted incomes and low interest rates boosted inflation to an eye-watering peak of 7.3 per cent in 2021.
To tame inflation, the RBNZ boosted the OCR to 5.5 per cent and held it there for more than a year before starting its cutting cycle in August.
The consumer price index back is around the midpoint of its target band, last measured at 2.2 per cent in the year to September.
The economy desperately needs a boost, given GDP fell by 0.2 per cent in the past year.
In per capita terms, NZ's post-pandemic slump has been worse than the country's impact from the global financial crisis of 2007-08.
Finance Minister Nicola Willis said the 125bp drop since August made a family with a $500,000 mortgage around $180 a fortnight better off if their bank passed on the cuts.
"The drop means many everyday Kiwis can focus more on what matters most to them, and less on making the next mortgage repayment or whether their card will decline at the supermarket," she said.
The OCR cut comes on the one-year anniversary of Chris Luxon's conservative coalition government being sworn in.
Mr Luxon claimed his government's efforts to cut public spending was instrumental to the interest rates cuts.
"Mortgage relief is on the way because our plan is supporting lower inflation," he said.
Economists point to the sharper drop in tradeable, or overseas inflation, including a much lower global price for fuel, as having more of an impact.
