By Sadiq Al Gobahi 
The Reserve Bank of New Zealand (RBNZ) has issued a warning about the challenging economic conditions facing the country1. In its semi-annual Financial Stability Report, the RBNZ highlighted rising unemployment and delayed business investment plans due to financial hardships2. The report pointed out that weakness in domestic economic activity has become more pronounced, with subdued global growth and high interest rates reducing demand2.
RBNZ Governor Adrian Orr expressed concern about the lag between interest rate cuts and their impact on the real economy2. He emphasized the need to avoid any surprises or shocks during this period2. Despite the economic struggles, the central bank noted that the financial system remains resilient, with banks well-positioned to support households and businesses2.
The RBNZ also mentioned that while the economy contracted in the third quarter, it expects a gradual recovery as inflation eases and interest rates are adjusted2. However, the central bank anticipates a slight increase in non-performing loans, although they remain below levels seen in previous recessions2.
For more details, you can read the full article on Reuters.
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