MNI BRIEF: RBNZ "Deliberately" Slowing Economy - Orr

Reserve Bank of New Zealand Governor Adrian Orr responded to criticism about a looming recession, saying tighter policy was needed to cool spending and tame inflation, in comments before a parliamentary committee on Thursday.

"We are deliberately trying to slow aggregate spending in the economy. The quicker inflation expectations come down, the less work we need to do and the less likely it is that we have a prolonged period of low or negative growth," Orr said. His comments came after the Monetary Policy Statement released on Thursday forecast a peak-to-trough contraction in New Zealand's growth next year and early 2024. The RBNZ hiked rate by 75bp to 4.25% on Wednesday.

Orr said aggregate spending needs to slow, with higher rates hopefully leading to a shallow 1% GDP slowdown over the three to four quarters to the second half of next year and to 2024. He downplayed the need for a meeting before the next gathering of the board in February. "We can be reconvened at any point in time as necessary. In the absence of economic shocks over the next couple of months, February is fine."