Wellington, Nov 27 : New Zealand's retail sector is looking to strong pre-Christmas sales, hoping that Wednesday's sizable cut of the official cash rate (OCR) will improve consumer confidence during one of the busiest weeks of the year.

A rise in confidence will help New Zealand retailers, who have been suffering a continued downturn in sales, with 70 per cent of survey respondents saying they did not meet their sales targets in the July-September quarter, said a Wednesday statement of the retailers' association, Retail NZ, citing its recent Retail Radar quarterly survey.

As inflation returns to the target band, the Reserve Bank of New Zealand (RBNZ)'s reduction of the OCR by 50 basis points to 4.25 per cent, the lowest since November 2022, brings hope for Christmas retail trading, the statement said.

New Zealand's core retail sales fell 1.7 per cent compared to the same quarter of 2023. Total retail sales, including motor vehicles and parts, and fuel, were down 2.8 per cent, according to Stats NZ's latest Retail Trade Survey, Xinhua news agency reported.

"A turnaround in the economy can't come soon enough for the retail sector," said Retail NZ Chief Executive Carolyn Young, adding that strong pre-Christmas sales are critical to retailers meeting their annual sales targets.

Although the current economic activity in New Zealand remains subdued and output continues to be below its potential, the economic growth is expected to recover during 2025, as lower interest rates encourage investment and other spending, according to the RBNZ Monetary Policy Committee.

/IANS