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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news