The Reserve Bank (RBNZ) has held its benchmark interest rate steady but warned further cuts may be needed to stimulate growth and counter global risks.
The official cash rate (OCR) was held as expected at a record low 1.5 percent.
Governor Adrian Orr said the economy has softened further since its decision in early May, with continued weak business confidence and investment, and worsening global trade outlook.
"Given the weaker global economic outlook and the risk of ongoing subdued domestic growth, a lower OCR may be needed over time to continue to meet our objectives."
The RBNZ cut the cash rate by a quarter of a percentage point last month, the first move in more than two years because of rising risks at home and abroad. It said the move would help give the economy a shot in the arm by reducing borrowing costs and promoting investment and spending.
Mr Orr said low interest rates and increased government spending were expected to lift the economy. Inflation was expected to reach its 2 percent target and employment should remain strong, which are the RBNZ's overriding policy objectives.
Interest rate decisions are now made by a committee of four RBNZ staff and three outside members.
A summary of the committee's deliberations showed discussion about the effect of increased government spending, soft wage growth, and a slowing housing market dampening consumer spending.
"The Committee discussed whether additional monetary stimulus was necessary given continued falls in global growth and subdued domestic demand. The members agreed that more support from monetary policy was likely to be necessary," the statement said.
The central bank's forward projections last month pointed to another rate cut by the end of the year or early next year, with no move upwards before late 2021.
The New Zealand dollar bounced around against the US dollar after the decision, before settling slightly higher around 65.6 US cents.
Westpac chief economist Dominick Stephens said the RBNZ was sounding more concerned and urgent about the need for further rate cuts.
"The RBNZ seems to have ramped up the likelihood that the OCR will be reduced further... the RBNZ will most likely cut the OCR in August," Mr Stephens said.