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2026-09-16 11:56:08
[If Labour wins, the Reserve Bank of New Zealand may shift to a "dual mandate"] (1) If the Labour Party wins the New Zealand general election in November, the Reserve Bank of New Zealand is likely to receive a broader mandate to include both low inflation and low unemployment in its targets. (2) Westpac economist Darren Gibbs said that in a demand-driven economic cycle, the requirement to increase employment is not very meaningful because inflation and employment targets usually converge in such cycles. (3) But he added that when there is a supply shock, inflation rises while employment falls, which forces policymakers to balance conflicting targets. (4) He said that restoring the dual mandate could lead to a slightly slower return of inflation to the target and a slightly lower peak in interest rates.
