Watch: economist’s interest rate prediction

*Watch the full interview in the video player above*

Kiwibank economist Jeremy Couchman explains why he thinks the Reserve Bank will cut interest rates as early as May and again later this year.

Couchman says the latest inflation figures were much weaker than the market expected and are even lower than the Reserve Bank’s own weak forecast.

Inflation was up just 0.1 percent compared to the previous quarter meaning that the annual rate is now 1.5 percent.

Prices of imported goods and services have been falling and offsetting higher domestic inflation.

Petrol prices for the quarter fell 7 percent and international airfares were down 12 percent.

The weakening outlook for the global and local economy is a worrying sign for RBNZ wanting to get inflation back to 2 percent, says Couchman.

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