There’s a term in economics, the precautionary savings motive, which refers to the point where consumers see enough trouble on the horizon that they start holding onto their cash for a rainy day.
ANZ chief economist Sharon Zollner said Kiwis still have not reached that point, despite repeated warnings from the Reserve Bank about a looming recession, and stance that it would manufacture a slowdown if necessary to tackle inflation.
“The Reserve Bank has been doing its best to freak people out and make them a bit nervous and make them save a bit more and spend a bit less, but so far they’ve got limited tractions,” she said.
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