US Fed Hikes Interest Rates as NZ Economy Surpasses Expectations
The US Federal Reserve Bank has raised interest rates for the first time in three years. The target range is now 3.75-4%, up 25 basis points, as part of efforts to quell stubbornly high inflation and bring it back down to the 2% target faster.
New Zealand's economy also performed better than expected, growing by 0.2% over the June quarter. This translates to an annualised growth rate of 1.7%. While construction played a major role in this growth, consumer weakness was evident in sectors that rely on discretionary spending, such as retail.
Overseas tourist arrivals have exceeded pre-COVID levels for the first time since July 2023. The number of visitors has reached 100.4% of what it was in July 2019, and Kiwibank is optimistic about a bumper summer season continuing this momentum.