Reserve Bank governor Graeme Wheeler's response was to start rolling back some of 2014's interest rate hikes, and the official cash rate will end the year back at its record-low 2.5 percent level. The bank's forecast track for the benchmark rate indicates no more cuts or hikes for the next three years.
Some had judged Wheeler as being too hasty in hiking last year, arguing there was a case for rates to go even lower as inflation idled below the bank's 1-to-3 percent target band, helped by a strong kiwi dollar and cheap crude oil.
The kiwi's strength posed a dilemma for Wheeler, keeping tradable inflation low and making cuts to the OCR a no brainer except for the risk that it would lead to lower mortgage rates and add fuel to a rampant Auckland housing market, where property values were up an annual 24 percent in November, driving a record 15 percent gain across the nation. The trade-weighted index is heading for a 6 percent decline this year.
To counteract the cost of borrowing cheaper, Wheeler has rolled out a new set of restrictions on bank lending with small deposits, this time targeting investors who have been judged to be fuelling activity over the past year-and-a-half.
The new restrictions only came into effect in November, and added to the government's own measures to quell some demand by requiring foreign buyers to have an IRD number and introducing a two-year brightline test which would allow the tax department to seek its cut from sales of property held within that period.
Along with trying to rein in rising house prices, the government had to contend with the prospect of missing its targeted operating surplus as low interest rates chipped away at the tax take on savings, tepid inflation leaned against GST, and rising unemployment meant the projected gains in income tax didn't eventuate.
Finance Minister Bill English managed to achieve his first surplus since taking over the Crown's finances in 2008, but de-emphasised the desire for continual surpluses in coming years, saying the trajectory was more important over time.
The government had reason to celebrate with the successful conclusion of the Trans-Pacific Partnership negotiations. While trade benefits didn't extend to the dairy industry, the consequences of New Zealand not joining the trading bloc had been described as "unthinkable" by former Prime Minister Helen Clark. The TPP still has to get through a fractured US House of Representatives and the parliaments of each member nation before it can be ratified.
While that was chalked up as a win, New Zealand's reputation as open for foreign investment took a knock when Associate Finance Minister Paula Bennett and Land Information Minister Louise Upston scuttled Shanghai Pengxin's $88 million pitch to buy the 13,843 hectare Lochinver Station near Lake Taupo, saying it failed the national benefit test.
The Financial Markets Authority was busy in the year dealing with foreign firms trying to coat-tail on New Zealand's squeaky clean reputation by registering on the local financial services provider register.
The market watchdog also wrapped up its long-running dispute with Hanover Finance, cutting a deal with the directors, including Mark Hotchin but not shareholder Eric Watson, to pay $18 million to the small number of investors who would have been covered by its civil claim.
The FMA also reached a $1.5 million deal with Milford Asset Management over a market manipulation claim which still hangs over the fund manager's former staffer Mark Warminger.
Disgraced Blue Chip boss Mark Bryers showed his face in New Zealand seeking a discharge from his five-and-a-half year bankruptcy to let him do business across the Tasman. The courts granted his request, but imposed a seven-year ban from him acting as a manager or director in New Zealand, leaving it up to Australian officials to how he acts over there.
The Commerce Commission finally came to a conclusion on what telecommunications network operator Chorus should be able to charge on its copper wires, and is still trying to figure out whether Z Energy should be allowed to buy the service station chains owned by Chevron New Zealand, while Royal Dutch Shell is weighing up whether to quit New Zealand altogether.
Retailers continued to struggle in a changing environment, with Wellington stalwart department store Kirkcaldie & Stain's selling to Australia's David Jones, chains Wild Pair and Shanton calling in receivers, and Kathmandu Holdings fending off a hostile takeover by Briscoe Group. The government wants to make life easier by upping its take on customs duty from overseas purchases, but hasn't figured out just how to do so yet.
The stock market had a quiet year in terms of new companies emerging, with just four initial public offerings, and little appetite for small to medium sized enterprises top join NZX's NXT market. Graeme Hart scaled back and then ditched plans to float what's left of Carter Holt Harvey.
Crowd-funding platforms attracted more interest at a micro-level, though are competing in a different space to the NZX and its small-cap market.
