NZ Retail Sales Contraction Sparks Rate Cut Expectations

New Zealand's retail sales contracted by 0.5% in Q2 2025, missing market expectations of a 0.1% increase, according to official data released today.

The decline follows a modest 0.2% rise in the first quarter, indicating that the rebound was short-lived.

Core retail sales, which exclude fuel and vehicle-related spending, also fell by 0.4%, suggesting that the weakness is broad-based rather than confined to volatile categories.

The data comes at a critical time for the Reserve Bank of New Zealand (RBNZ), which has been navigating a delicate balance between curbing inflation and supporting growth.