Reserve Bank of New Zealand Governor Says Core Inflation Remains Too High

The video discusses the current economic situation in New Zealand, focusing on the official cash rate (OCR) set at 5.50%. It highlights how this rate is intended to control inflation and support sustainable employment. The economy is evolving as expected, with activity slowing in interest rate-sensitive areas. Labor shortages are easing due to reduced demand and high immigration. While headline inflation and expectations have decreased, core inflation remains high, mirroring global trends.

What is the primary reason for maintaining the OCR at a restrictive level?

• To decrease employment rates

• To ensure inflation returns to the target range

• To boost international trade

• To increase consumer spending

Which part of the economy is most affected by interest rates according to the video?

• Tourism industry

• Technology sector

• Export industry

• Interest rate-sensitive sectors

What factor is contributing to the easing of labor shortages in New Zealand?

• Technological advancements

• Decrease in population

• Increase in exports

• High net immigration

What is the current trend in headline inflation and inflation expectations?

• Both are stable

• Headline inflation is increasing, but expectations are stable

• Both are increasing

• Both are declining

How does New Zealand's core inflation compare to global trends?

• It is not affected by global trends

• It is similar to global trends

• It is lower than global trends

• It is higher than global trends