New Zealand: Inflation edges up in Q4 but undershoots expectations
January 18, 2013
In the fourth quarter, consumer prices fell 0.2% over the previous quarter, which contrasted 0.3% increase recorded in the third quarter. According to Statistics New Zealand, lower prices for food, housing as well as for furniture and communication were the main drivers behind the quarterly drop.
Despite the quarterly fall, annual headline inflation inched up from 0.8% in the third quarter to 0.9% in the fourth. That said, the reading fell short of market expectations, which had inflation rising to 1.2%. At the current level, inflation remains below the Central Bank's inflation target range of 2.0% plus/minus 1.0%.
The Reserve Bank of New Zealand expects inflation to average 1.5% in the fiscal year 2013 (ending March 2014). For fiscal 2014, the Bank anticipates inflation to average 2.0%.
Author: Ricardo Aceves, Senior Economist