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- By Christopher Luxon, Prime Minister and MP for Botany
The Reserve Bank has recently announced a further reduction to the Official Cash Rate (OCR) – a cut of 25 basis points to 3.5 per cent.
This follows other recent positive economic news, with Stats NZ announcing that GDP grew by 0.7 per cent in the December, 2024, quarter, showing New Zealand’s economy is turning the corner.
Our main focus as a Government is to deliver economic growth, because a growing economy puts more money into your bank account to help with the cost of living.
A growing economy means more opportunities, more jobs, higher incomes and ultimately better health, education, and public services.
We’re working hard to lift economic growth by backing our farmers and growers, promoting tourism, investing in infrastructure, and making New Zealand an outstanding place to do business.
We’ve put a stop to wasteful Government spending and are making sure the public service is focused on its most important goal – delivering the world-class services Kiwis deserve.
We’ve delivered tax relief for the first time in over a decade, and FamilyBoost is helping thousands of families put their kids through early childhood education.
We’ve also tamed inflation, now at 2.2 per cent, down from a high of 7.3 per cent under Labour.
This drop in inflation has made it possible for the Reserve Bank to cut the OCR, which now sits at 3.5 per cent. In turn, these cuts are allowing banks to lower mortgage interest rates.
The 2 per cent drop in the OCR since we came into Government means that, for an average 25-year mortgage of $500,000, repayments could be around $300 lower per fortnight – putting more money back into your bank account.
We know there’s still more work to do, but the economic outlook is improving, with forecasts predicting further growth in the coming quarters.
We’re working around the clock, pulling every lever and building every relationship to secure new trade deals, attract foreign investment, build and improve infrastructure, and keep driving economic growth.
