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Business confidence has sunk to a fresh record low as firms prepare for a recession next year.
The ANZ business confidence survey for December showed a net 70 percent of respondents expected the broader economy to deteriorate, down 13 points from November.
The more closely followed firms' view of their own prospects fell 14 points, with a net 26 percent of firms expecting to be worse off.
ANZ senior economist Miles Workman said the Reserve Bank appeared to have achieved "shock value" after hiking the official cash rate 75 basis points, with its hawkish forecasts and warning of a deliberately engineered recession next year.
"The fall in business confidence is certainly dramatic, but while it's at a fresh record low, it would be incorrect to read this as an indication that any recession is likely to be unusually severe."
Instead, the recession was "unusually widely anticipated", Workman said.
"It's a situation unprecedented in recent decades for a central bank to admit it is deliberately engineering a recession."
Inflation and pricing pressures were "intense", but cost expectations moved slightly lower, ANZ said.
It also said there was a marked decline in retail and manufacturing sentiment.
Business inflation expectations were similar to last month's, at 6.23 percent.
"So do the weak results of this survey corroborate or challenge the RBNZ's expectation for a shallow recession next year? Given the typical monthly volatility, the perhaps unsurprising answer is, 'it depends'.
"It depends on whether the weak intentions and expectations persist, or whether the shock value dissipates and things normalise somewhat," Workman said.
That would depend on whether firms saw demand slow as abruptly as they were expecting at present, he said.