Head of New Zealand Reserve Bank Concedes It Is Engineering a Recession
Adrian Orr, governor of the Reserve Bank of New Zealand (RBNZ), admitted the bank was engineering a recession to lower inflation.
The remark comes a day after the central bank raised the official cash rate (OCR) by a record 75 basis points to 4.25 percent.
In its monetary policy statement (pdf), the RBNZ revealed the economy is expected to enter a recession in 2023.
“This economic contraction will, in part, be a result of higher interest rates, as the Reserve Bank acts to reduce inflation and return employment to a more sustainable level,” it said.
Speaking to the Finance and Expenditure Committee, Orr said actual and expected inflation is too high and needs to be reduced….