New Zealand Inflation

New Zealand

Inflation stabilizes in first quarter

In the first quarter, consumer prices jumped 0.4% over the previous period, which contrasts the 0.2% drop registered in the final quarter of 2012. The result, nonetheless, fell short of market expectations, which had consumer prices rising 0.5%. According to Statistics New Zealand, the reading particularly reflects higher prices for cigarettes and tobacco, due to a 10.9% increase in excise duty in January.

As a result, annual headline inflation remained unchanged at the 0.9% rate recorded in the fourth quarter. At the current level, inflation remains below the Central Bank's inflation target range of 2.0% plus/minus one percentage points.

The Reserve Bank of New Zealand expects inflation to average 1.4% in the fiscal year 2013/14 (ending March 2014). For fiscal year 2014/15, the Bank anticipates inflation to average 1.8%. FocusEconomics Consensus Forecast panellists expect inflation to average 1.7% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, the panel anticipates that inflation will rise to 2.3%.

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New Zealand Inflation Chart

New Zealand Inflation Q1 2013

Note: Quarter-on-quarter and annual variation of consumer price index in %.
Source: Statistics New Zealand and FocusEconomics calculations.

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