Stressed woman


Kiwis may face continued challenges in 2024 as interest rates are anticipated to increase further, warned Milford portfolio manager Mark Riggall. Inflation remains stubbornly high at 5.6 percent, more than double the Reserve Bank’s target. Additionally, the cost of food continues to be a concern, with Stats NZ reporting a 6.3 percent increase in food prices in October compared to the previous year.

Real Estate Agents: Who has the lowest and highest fees? WATCH

Compounding these issues, thousands of New Zealanders are refinancing their mortgages from the low rates observed during the COVID-19 period (around 2-3 percent) to new rates of approximately 6-7 percent. However, this shift has led to challenges, as indicated by the recent Centrix report, which revealed that in November, over 19,200 mortgage accounts were overdue, marking a 25 percent year-on-year increase.

Looking ahead, Milford portfolio manager Mark Riggall discussed the economic outlook for 2024 on AM. He emphasized the crucial question of how long the Reserve Bank (RBNZ) will maintain current interest rates, especially after the RBNZ’s decision to keep the official cash rate (OCR) at 5.5 percent in its final monetary policy decision of the year. Riggall acknowledged the expectation that interest rates may have a more pronounced impact in the coming months, but he also noted that central banks might have completed their tightening measures.

Reflecting on 2023, Riggall highlighted the initially pessimistic outlook due to significant central bank rate hikes and global concerns, including a war in Europe and an energy crisis. However, he noted surprising economic growth in the US, which exceeded expectations at around 2.5 percent, contrary to the predicted less than half a percent. On the flip side, China’s economic performance fell short of expectations, despite the anticipation of a massive boom after reopening from strict COVID-19 lockdowns. China’s economy, according to Riggall, was underwhelming and did not live up to the projected strong performance for the year.