An economist is pointing out a potential problem with the Reserve Bank’s economic forecast. 

The Monetary Policy Committee, chaired by Anna Breman, has decided to keep the OCR unchanged at 2.25% for now. 

It says while inflation is above the target band, the economy still needs some time to recover. 

Cameron Bagrie told Ryan Bridge that the problem with the Reserve Bank’s forecast is the assumed uptick in productivity growth. 

He says they’re assuming the supply side capacity, via productivity growth, will improve, which will keep inflation lower, but if we can’t get supply side capacity up, inflation will prove to be a lot stickier.  

LISTEN ABOVE 

An economist is pointing out a potential problem with the Reserve Bank’s economic forecast.&nbsp;
The Monetary Policy Committee, chaired by Anna Breman, has decided to keep the OCR unchanged at 2.25% for now.&nbsp;
It says while inflation is above the target band, the economy still needs some time to recover.&nbsp;
Cameron Bagrie told Ryan Bridge that the problem with the Reserve Bank’s forecast is the assumed uptick in productivity growth.&nbsp;
He says they’re assuming the supply side capacity, via productivity growth, will improve, which will keep inflation lower, but if we can’t get supply side capacity up, inflation will prove to be a lot stickier. &nbsp;
LISTEN ABOVE&nbsp;

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

Early Edition with Ryan Bridge

Cameron Bagrie: Independent Economist on the OCR being held at 2.25%

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/4b9a349c-b91a-46c1-ad81-b3f50175fb23/transcript