The economy of New Zealand 🇳🇿 fell into recession in the third quarter as economic activity declined much more than expected and output in the previous quarter was cut, with forecasts suggesting more interest rate cuts to come.

The market has raised expectations that the Reserve Bank of New Zealand (RBNZ) will continue to cut interest rates, after already reducing them by 1.25% to 4.25%.

Current swap contracts indicate a 70% probability of a 0.5% cut in February, with interest rates predicted to decrease to 3.0% by the end of 2025.