High inflation in certain parts of the economy is dashing hopes of a cut in the OCR.  

Reserve Bank Chief Executive Paul Conway says despite overall inflation being at 4.7 percent, non-tradable inflation is still high at 5.9 percent.  

New Zealand Initiative Economist Director Oliver Hartwich says that non-tradable inflation is produced in New Zealand.  

He told Mike Hosking that the Reserve Bank’s policy to reduce inflation needs to be in sync with government fiscal policy.  

Hartwich says high government spending makes it harder for the Reserve Bank to do its job.  

LISTEN ABOVE 

• RBNZ unlikely to cut down interest rates early this year, economist predicts
• 'We still have a way to go' - RBNZ says the inflation fight isn't over