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

 

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news