New Zealand: Inflation falls to lowest level in over a decade
July 17, 2012
In the second quarter, consumer prices rose 0.3% over the previous three-month period, which was below the 0.5% increase recorded in the first quarter and fell short of market expectations of a 0.5% rise. According to the statistical institute, higher prices for electricity and fresh food more than compensated for lower prices for telecommunications. As a result of the subdued quarterly increase, annual headline inflation declined from 1.6% in the first quarter to 1.0% in the second quarter, which represents the lowest level in 13 years. At the current level, inflation remains at the lowest margin of Central Bank's inflation target range of 2.0% +/- 1.0%. The Reserve Bank of New Zealand expects inflation to average 1.9% in the fiscal year 2012 (ending March 2013). For the fiscal year 2013 (ending March 2014), the Bank forecasts inflation to average 2.1%.