Economists are picking the Reserve Bank could cut its official cash rate by August if the global economic outlook worsens and if the local economy remains subdued.

As expected, the Reserve Bank kept its official cash rate (OCR) at 1.5 per cent, but the bank's messaging about what may lie ahead was stronger than many had anticipated.

"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 bank said in a statement.

The central bank said domestic growth had slowed over the past year, although it noted that construction activity strengthened in the March quarter.

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Softer house prices and subdued business sentiment continued to dampen domestic spending, it said.

The global economic outlook had weakened, and downside risks related to trade activity had intensified.

The Reserve Bank noted that a number of central banks are easing their monetary policy settings to support demand.

At home, it expects low interest rates and increased Government spending to support a lift in economic growth and employment.

The decision to leave the rate unchanged came as no surprise to the market.

"However, the policy assessment confirmed that an easing bias was in place, noting a 'lower OCR may be needed over time to continue to meet our objectives'," ASB economists said in a commentary.

Some banks, including ASB, are a predicting a rate cut in August.

"Future moves in the OCR are likely to remain data-dependent and will also be contingent on global events, the actions of overseas central banks and the NZ dollar," ASB said.

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ANZ said there was no urgency for the Reserve Bank to cut the OCR again immediately, following its 25-basis-point cut in May.

The economy has indeed slowed considerably, but the most forward-looking indicators – and looser financial conditions – suggest a recovery in the second half of the year, it said.

"The global slowdown is real, but the pass-through into the New Zealand economy has been muted so far – and there are reasons to think commodity prices may continue to be resilient," ANZ said.

ANZ said what global central banks do is important because interest rate relativities have implications for currencies.

The Reserve Bank of Australia - which has a cash rate of 1.25 per cent, is expected to cut again in July and August.

New Zealand's Reserve Bank has made it clear that it is likely to cut again sooner rather than later, it said.

ANZ now expects a rate cut in August, with a follow-up cut in November.