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

 


NZ inflation, rate expectations edge higher: RBNZ survey

NZ inflation, interest rate expectations edge higher in RBNZ survey

By Paul McBeth

May. 22 (BusinessDesk) - New Zealand inflation is expected to edge,up over the coming year and lead to higher interest rates as the economy gathers momentum, according to the Reserve Bank's latest quarterly survey.

The consumers price index is seen rising to 2.08 percent over the coming year and 2.36 percent in the next two, up from 2.03 percent and 2.33 percent respectively, the survey of business managers, conducted by ACNeilson for the Reserve Bank, shows.

Inflation is running at an annual pace of 1.5 percent in the March quarter. The central bank kicked off a tightening cycle in March, hiking the official cash rate twice to 3 percent in a bid to cool the threat of building inflation.

A net 40 percent of the survey's respondents see current monetary conditions as being easy, down from a net 57 percent in the March quarter, and a net 21 percent see tighter than neutral conditions by the end of March next year.

The 90-day bank bill rate, often used as a benchmark to forecast the track of the OCR, is expected to be 3.5 percent by the end of June, rising to 4.1 percent by March next year.

"The latest RBNZ Survey of Expectations indicates businesses expect only a modest increase in inflation over the next couple of years," ASB economist Christina Leung said in a note. "While this will likely flow through to a lift in underlying inflation pressures, we expect this lift will be modest relative to the ramp-up in activity expected given the increased capacity of the NZ economy."

The survey shows economic growth is expected to be 3.3 percent in the year ahead, up from 3.2 percent in the previous quarter and 2.9 percent two years out. The Treasury raised its economic outlook, forecasting gross domestic product to grow 3 percent in the year ended March 31, 2014, before peaking at a decade-high 4 percent in 2015.

Business managers see faster earnings growth in the coming year, with hourly wages rising at a 2.9 percent pace in the year ahead and 3.1 percent in the two-year series. They had previously seen earnings growth of 2.6 percent and 2.9 percent in the one- and two-year horizons.

Unemployment expectations were largely unchanged, with respondents predicting the jobless rate will fall to 5.6 percent in the coming year, and 5.3 percent two years out, from the current 6 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Restrictions Lifted: No Further Tau Flies Found

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Manurewa, Auckland, due to the Tau fly, have been lifted as of 2.26pm on Sunday 7 February. More>>

Crowdfinding: Awaroa Beach To Become Public Land If Appeal Succeeds

Conservation Minister Maggie Barry says a privately-owned beach will become part of the Abel Tasman National Park if an online crowdfunding campaign to buy it succeeds... More>>

ALSO:

Meat Workers Union: Waitangi Mondayisation Flaunted By Large Employer Of Maori

At the AFFCO Talley owned meat plant in Rangiuru, the company has resorted to bullying and threats... saying they could be disciplined and their union sued for an unlawful strike if workers exercise their rights to a paid day off tomorrow. More>>

Earlier:

ETS Review: Modelling Documents Released

Three technical documents are being released to help New Zealanders engage with the Emissions Trading Scheme (ETS) review, Climate Change Minister Paula Bennett says. More>>

ALSO:

Northland: Govt Plan Targets Transport, Web, Maori Assets

The government has released a 10-year plan to attract investors and lift economic growth in Northland, a region that perennially underperforms the rest of the country even while being endowed with natural beauty, productive land, minerals, a potential workforce, scope for manufacturing, forestry and aquaculture, and proximity to Auckland. More>>

ALSO:

Statistics: Unemployment Rate Falls To 5.3 Percent

The unemployment rate fell to 5.3 percent in the December 2015 quarter (from 6.0 percent), Statistics New Zealand said today. This is the lowest unemployment rate since March 2009. There were 16,000 fewer people unemployed than in the September ... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news