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


NZ inflation expectations dwindle as shine taken off economy

NZ inflation expectations dwindle as shine taken off economic growth

By Jonathan Underhill

Aug. 19 (BusinessDesk) - New Zealand businesses see a tamer track for inflation over the next two years as they trim their expectations for economic growth, suggesting the central bank doesn't have to rush to raise interest rates again.

The consumers price index is seen rising at an annual 1.96 percent on a mean basis in the year ahead, down from the 2.08 percent rate seen three months ago, according to the Reserve Bank's survey of expectations. Two-year inflation expectations fell to 2.23 percent from 2.36 percent.

For the September quarter, CPI is seen rising 0.5 percent, down from 0.59 percent last quarter. Inflation is seen slowing to 0.36 percent in the fourth quarter of the year.

Businesses see less inflation in an economy that may not be growing as fast as expected. The one-year ahead expectation for gross domestic product was trimmed to 3.1 percent from 3.3 percent and two years out the annual pace is seen slowing to 2.7 percent from 2.9 percent.

The survey comes after the release of the Treasury's pre-election fiscal and economic update, which also points to a slower pace of growth. The Treasury cuts its forecast for GDP in the year ending March 31, 2015, to 3.8 percent from its 4 percent forecast in the May budget, citing weaker commodity prices and tamer inflation.

The RBNZ survey shows one-year-ahead expectations for hourly earnings growth fell to 2.6 percent from 2.9 percent, while the two-year series fell 0.3 percentage points to 2.8 percent. Unemployment one year ahead is seen at 5.5 percent, down 0.1 percentage point from the second quarter, while the two-year-ahead rate held at 5.3 percent.

The survey was conducted on August 6-7 and was of 83 business managers and professionals.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news