The New Zealand unemployment rate is expected to rise to 5.3% in the March quarter from 5.1% in the December 2024 quarter as job growth is not fast enough to meet population growth, Westpac said in a Wednesday report.
The current spare capacity in the labor market will continue to exert downward pressure on wage growth, the report said.
The Reserve Bank of New Zealand's (RBNZ) February Monetary Policy Statement predicted a slight rise in unemployment to 5.2%, marking the peak for this cycle.
However, Westpac forecasts suggest the RBNZ is overestimating the labor market's response to the broader economic upturn.
Westpac expects another 25 basis points cut in the official cash rate at the 28 May policy review.
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