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By Lucy Craymer
WELLINGTON (Reuters) - Reserve Bank of New Zealand Governor Adrian Orr said on Thursday that New Zealand was now in an environment of low and stable inflation but warned the volatile international landscape could impact New Zealand's economy.
Orr added that New Zealanders should feel in 2025 like things are improving and that there will be "GDP growth, employment growth coming through, and low and stable inflation."
However, Orr, who was speaking in front of a New Zealand parliamentary committee, added there was currently "geoeconomic fragmentation, so global potential growth will be lower and we will see international price volatility."
Orr's comments come after New Zealand's central bank cut the official cash rate by 50 basis points on Wednesday to 3.75% and forecast the cash rate would be at 3.0% before the end of the year.
Central Bank chief economist Paul Conway told the committee that as the trade war escalates "there will be more inflation there, and lower growth and a less efficient global economy, and that will spill over into New Zealand."
"The best thing we can do is have headline inflation at 2% so that we can sort of absorb that future volatility," he said.
(Reporting by Lucy Craymer; Editing by Sandra Maler)
