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2026-07-14 06:10:12
[Reserve Bank of New Zealand Chief Economist: Middle East Conflict Complicates Policy, Measures to be Taken If Necessary] 1. Reserve Bank of New Zealand Chief Economist Conway stated that the Middle East conflict, like all supply shocks, complicates monetary policy. Although oil prices have fallen somewhat, the impact of this shock will continue to ripple through the economy for some time. 2. Conway emphasized that monetary policy can prevent the first round of price effects from evolving into a second round of inflationary pressures, but understanding how businesses respond to cost shocks is the core foundation for maintaining low and stable inflation. However, spare capacity in the economy should help limit further transmission of inflation. 3. Regarding inflation expectations, Conway said it is encouraging that medium-term inflation expectations remain well anchored. However, if the inflationary pressures triggered by the Middle East conflict persist stronger than expected, the central bank will take measures, and may need to further reduce monetary stimulus.
