29 May 2026 – On Friday 29 May, Reserve Bank of New Zealand Governor, Dr Anna Breman, spoke to rural and primary sector leaders in the Hawke’s Bay discussing insights from the May 2026 Monetary Policy Statement.
The lunchtime event was hosted by Grasshoppers Hawke’s Bay, an organisation representing a diverse network of farmers, growers, processors, and rural professionals across the region.
Speaking to key themes from the May 2026 Monetary Policy Statement, Dr Breman discussed the Monetary Policy Committee’s decision to hold the OCR at 2.25 percent in the May 2026 MPS.
“The global economic backdrop remains uncertain, with supply chain disruptions and higher input costs weighing on the outlook,” Dr Breman said.
“Overall, New Zealand and our trading partners are likely to see weaker growth alongside higher near-term inflation in response to the Middle East conflict.”
She said domestic conditions reflect subdued confidence and uneven performance across sectors with some business, such as those within the primary sector, still performing well while other sectors are struggling.
“Business feedback and survey data point to overall weaker confidence and spending, with rising costs continuing to squeeze margins and weigh on investment and hiring decisions.”
Dr Breman highlighted ongoing uncertainty around inflation pressures.
“Expectations of higher costs could keep inflation elevated, but weaker demand and higher unemployment are expected to dampen pressures over time,” she said.
“The Committee remains focused on ensuring inflation returns to target while avoiding unnecessary volatility in the economy. On balance, the OCR is likely to increase sooner and by more than previously signalled.”
This visit marked Dr Breman’s third regional engagement, following earlier visits to Christchurch and the Waikato. During her time in the Hawke’s Bay, Dr Breman met with local council leaders and agencies involved in Cyclone Gabrielle recovery efforts, along with iwi representatives, horticulture producers, industry bodies, and rural advocacy groups.
Discussions from these engagements provided practical, on-the-ground insights into regional challenges, including recovery and resilience as communities continue to navigate the impacts of severe weather events, and how organisations are responding to current economic conditions.
These perspectives support the RBNZ’s mandate by providing a clearer understanding of how economic disruptions and regional differences influence the broader economy and financial system stability, helping to inform well‑grounded monetary and financial policy decisions.
More information