Beyond the RBNZ's rate cut and updated forecasts, their special topic on the implications of global tariffs on Aotearoa certainly grabbed our attention. It's become a key issue in many of the conversations we're having with businesses and clients, and it's undoubtedly a challenging one to address. Our usual response centres around the fact that it's still too early to draw firm conclusions. But as history reminds us, tariffs and trade wars are negative for economic growth and carry inflationary implications. At present, the trajectory of rising tariffs is leaning toward a higher near-term inflation outlook, domestically. Particularly given the weakness of the Kiwi dollar against the strength of the USD. However, with the landscape constantly evolving, the timing and magnitude of further changes remain uncertain, and the true impact is yet to be realized. But we thought the RBNZ visually summed up the possibilities quite nicely in the table below.
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