Reserve Bank governor urges the country to ‘look to Canterbury’

Monday, 23 February 2026

Reserve Bank governor Anna Breman wants other regions to “look to Canterbury” as an example of how to recover from tough years – but warns the region’s strength does not make it immune.

Breman was in Christchurch for a Business Canterbury event attended by about 350 people, using the visit to set out her thinking on interest rates and inflation, and to hear directly from local firms about how the economy feels on the ground.

The visit came days after the bank held the official cash rate at 2.25%, having cut it from 5.5% over the past 18 months, and reaffirmed its view that inflation will return to its 2% target midpoint within the next year.

On her first visit to the South Island, Breman told The Press the region was now one of the stand-out parts of the country, with exporters investing and tech firms expanding.

“Well, it is clearly considerably stronger than other parts of the country,' she said. 'We’re seeing that manufacturing is doing really well. The tech sector is doing really well. Everything related to agriculture is doing really well.”

She said what she is hearing from businesses is a marked change from the crisis tone of the last few years.

“What people are saying is that they are all optimistic. You know, their businesses are actually doing well.”

Breman said Canterbury showed what recovery could look like in practice for regions still feeling stuck.

“We don’t really see the recovery [nationally] yet, but then you look at Canterbury and see how well it’s been going,” she said.

She said one challenge for the bank was the lack of timely regional data, and said she would “love” more detailed numbers to help judge how much spare capacity really exists in different parts of the country.

The bank’s latest forecasts point to growth slowly returning, with agriculture and manufacturing among the stronger sectors even as national unemployment has risen and household spending has been weak. Strong exporters in Canterbury, she said, attract workers and bring in income that flows through to other regions.

Asked if Canterbury could grow “too quickly”, she acknowledged the risk but said that was not her main concern, because there was still room for the rest of the country to catch up.

“It’s not such a high risk given that there’s so much spare capacity still in other parts of the country… At this point I think it’s definitely manageable.”

The bigger immediate threats, in her view, are outside Canterbury’s control – a sharp slowdown in key export markets such as China, geopolitical shocks that disrupt trade or energy supply, and another major natural disaster.

“There’s always just the risk of natural disasters, that they’re costly in terms of just the suffering from humans, but also in terms of the economy,” she said. “This is a region that went through the earthquakes and has managed to rebuild, but there’s always these kinds of risks that can hit.”

For households, the story is more mixed. Breman accepts many families feel they are standing still or going backwards, even as headline inflation edges lower and interest rates have been cut.

“When we say that inflation will fall, it means that prices will keep increasing but at a lower pace. And I think sometimes households think that all things are really going to get cheaper.”

Earlier rate cuts are still flowing through as fixed-term mortgages roll over, she said, and some borrowers are now seeing monthly repayments ease.

“So it is getting a bit better but it’s gradual and it’s after several tough years,” Breman said. “When you have that it takes a while before you really feel that it’s getting better.”