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

 


NZ inflation seen edging above RBNZ mid-point this year

NZ inflation seen edging above RBNZ mid-point this year, survey shows

Feb. 25 (BusinessDesk) – New Zealand inflation will average 2.03 percent in the coming year, just above the mid-point of the Reserve Bank’s target range, as economic growth picks up pace and interest rates rise, according to the central bank’s quarterly survey of expectations.

Inflation expectations for the year ahead have risen from 1.94 percent in the December quarter, according to the survey of business managers, conducted by ACNeilson for the Reserve Bank. Expectations for inflation two years ahead barely budged, slipping to 2.33 percent from 2.34 percent.

The survey comes ahead of the Reserve Bank’s March 13 monetary policy statement, which is expected to include a quarter point increase in the official cash rate to 2.75 percent, the first increase to a rate that’s been kept at a record low 2.5 percent since March 2011.

At Governor Graeme Wheeler’s last review on Jan. 30, he said the New Zealand economy has “considerable momentum” which will require interest rates to return to more normal levels as inflation stirs.

“Expectations of inflation over the medium term remain stubbornly above the 2 percent midpoint of the Reserve Bank's target band,” said Michael Gordon, senior economist at Westpac Banking Corp. “It's unlikely that the latest survey will have much bearing on the RBNZ's decision to begin raising the OCR at its next review in March, but it does underscore that the RBNZ has some work to do to re-establish the credibility of its inflation target. “

The survey shows economic growth is seen accelerating to 3.23 percent in the year ahead, up from the 2.96 percent pace predicted in the December quarter, while expectations for growth two years out was little changed at 2.88 percent. The 90-day bank bill rate is seen at 3.63 percent in a year’s time from a level of 3.01 percent expected for the end of the current quarter.

The jobless rate is seen falling to 5.62 percent in a year’s time from a previous expectation of 5.86 percent, while the two-year-out rate is seen falling to 5.36 percent from 5.56 percent.

The kiwi dollar is seen falling to 82.10 US cents next quarter from 83.21 cents currently. In a year’s time it is expected to have eased to 81.10 cents. The New Zealand dollar is seen edging up to 92.40 Australian cents next quarter from 92.29 cents currently and slipping back to 91.20 cents in a year’s time.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news