The first statement by Reserve Bank acting governor Grant Spencer said house price inflation — a key concern during the past 18 months — continued to moderate, due to loan-to-value ratio restrictions, affordability constraints and a tightening in credit conditions.
"This moderation is expected to continue, although there remains a risk of resurgence in prices given population growth and resource constraints in the construction sector," Mr Spencer said.
ASB chief economist Nick Tuffley said the result was "universally expected" and the "key message" was the Reserve Bank "maintaining a neutral stance".
"There is a hint the growth outlook may have been tweaked down very slightly," Mr Tuffley said.
Mr Spencer said GDP in the quarter to June grew in line with expectations, after relative weakness in the prior two quarters.
"While exports recovered, construction was weaker than expected.
"Growth is projected to maintain its current pace ... supported by accommodative monetary policy, population growth, elevated terms of trade, and fiscal stimulus," he said.
Annual consumer price index inflation eased in the June quarter, but remained within the Reserve Bank’s 1%-3% target range.
Mr Spencer said headline inflation was likely to decline in coming quarters, while longer-term inflation expectations remained anchored around 2%.