In a refreshing change after two years of pain, New Zealanders are certain to get further interest rate relief this week.
The question is how much.
On Wednesday, the Reserve Bank of New Zealand (RBNZ) will consider the official cash rate (OCR), currently at an oppressive 5.25 per cent.
Commentators believe the bank will consider a cut of either 25 - or more likely - 50 basis points (bps) at the October meeting, with further easing at the year's final gathering in November.
"We expect 100bps of easing by year end," ASB senior economist Mark Smith said.
NZ has battled recession for the past two years, with GDP falling 0.8 per cent since October 2022.
GDP per capita has declined by 4.6 per cent in the seven quarters since then, a greater fall than during the global financial crisis.
Unemployment has also risen from 3.3 per cent to 4.6 per cent in that time.
The economic carnage is all due to pandemic-era inflation, which spiked at 7.3 per cent, prompting the RBNZ into tough monetary policy.
The OCR sat at 5.5 per cent from May 2023 to August this year until a 25bps cut began their easing cycle.
Mr Smith said the delay to cutting rates cost jobs and would spur bigger cuts this year.
"In our view, the regret from holding the OCR too high for too long and causing longer-term economic damage to the labour market now outweighs the risk of inflation remain stuck well above two per cent," he said.
"Moving faster now will likely reduce the amount of OCR cuts that need to be delivered in future."
Westpac also see 100bps of cuts this year to end 2024 at 4.25 per cent, which would be lower than the Australian cash rate (4.35 per cent) for the first time in two years.
Kiwibank chief economist Jarrod Kerr believed a 50bp cut was coming, backed in by market expectations.
"Market traders have positioned for the outsized move and a 3 per cent cash rate by August next year," he said.
"Now that a 50bp cut is consensus amongst economists and market traders, it's actually harder NOT to deliver a 50bp cut.
"A 50bp cut ... with a signal of another in November, would only appease traders and keep wholesale rates where they are."
Kiwibank put its money where its mouth is, announcing a cut of its floating rate by 50bps on Tuesday on the eve of the RBNZ meeting.
The NZ Institute of Economic Research's shadow RBNZ board is torn between the 25 or 50bps cut, as is ANZ chief economist Sharon Zollner.
"We think it will be a tough decision in uncertain times. We don't see it as a no-brainer that a 50bp cut is in the bag or the right thing to do," she said.
"Given it's now being served up on a plate it seems likelier than not that the RBNZ will take the path of least resistance and deliver."
