Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ firms trim inflation forecasts; jobless rate to stay high

NZ firms trim inflation forecasts, see jobless above 6 percent for 2 years: RBNZ survey

By Paul McBeth

Nov. 27 (BusinessDesk) - New Zealand financial institutions are picking a slower pace of price increases in the coming year and aren't betting on the unemployment rate dropping below 6 percent for two years, according to a Reserve Bank's survey.

Respondents in the central bank's survey of expectations sliced 20 basis points from their one-year median forecast for the consumer price index to 1.77 percent, below governor Graeme Wheeler's long-term aim under the policy target agreement, and the two-year ahead median expectation at 2.3 percent, down by the same amount.

Respondents are picking CPI to rise 0.3 percent and 0.5 percent in the December and March quarters, implying annual inflation of 1.5 percent and 1.4 percent respectively.

"Monetary conditions are currently perceived as being easy, and are expected to remain easy over the forecast horizon," the survey said.

The subdued inflation outlook comes after third-quarter CPI figures showed consumer prices rose at an annual pace of 0.8 percent, falling short of the central bank's target band of between 1 percent and 3 percent.

Last month, governor Wheeler said he was keeping close tabs on inflation in his debut monetary policy statement, and would monitor indicators such as pricing intentions and inflation expectations data closely over coming months.

Respondents were gloomier about the labour market in coming year, with one-year ahead expectations for unemployment rising to 6.8 percent from 6.3 percent in the September survey, and the two-year forward horizon increasing to 6.3 percent from 5.9 percent.

Earnings growth expectations were pared by 10 basis points to 2.4 percent and 2.7 percent for the one-year and two-year outlooks respectively.

Government figures showed the jobless rate unexpectedly rose to a 13-year high 7.3 percent in the September quarter with a flat labour market in Auckland and falling full-time payrolls. Economists have been sceptical of the latest reading, which has surprised them with three quarterly increases in the headline unemployment figure.

Firms trimmed 0.1 of a percentage point from their one-year forecast for annual gross domestic product growth to 2.1 percent and held two-year expectations at 2.3 percent.

The 90-day bank bill rate is expected to be 2.7 percent by the end of the year, rising to 2.8 percent by September 2013. The bill recently traded at 2.66 percent.

Firms predict the yield on the 10-year government bond will be 3.8 percent by September next year. The yield was recently at 3.54 percent.

The New Zealand dollar is expected to be 81 US cents by the end of March, falling to 80 cents by September, and is predicted to be 80 Australian cents by the end of September next year. The currency recently traded at 82.24 US cents and 78.44 Australian cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Planes: Jetstar Launches Regional Network

Jetstar, the Qantas Airways budget offshoot, launched its new regional network in New Zealand with special $9 one-way fares and has narrowed down its choices to five routes and four destinations - Nelson, Napier, New Plymouth, and Palmerston North. More>>

ALSO:

Fisheries: Report On Underrsize Snapper Catch

The report found that commercial fishers caught 144 tonnes of undersized snapper in the Snapper 1 area – about 3% of the total commercial catch – in the year ending February 2015. The area stretches from the top of the North Island to the Bay of Plenty and is one of New Zealand’s most important fisheries. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news