New Zealand: Inflation falls to record-low in Q3
October 16, 2012
In the third quarter, consumer prices rose 0.3% over the previous period, which mirrored the increase recorded in the second quarter. According to the statistical institute, "the increase in the CPI reflects higher housing-related prices and seasonally higher vegetable prices". As a result of the subdued reading, annual headline inflation fell from 1.0% in the second quarter to 0.8% in the third quarter, undershooting market expectations, which had inflation remaining at 1.0%. The third quarter reading represents the lowest level in over a decade and, 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 1.8% in the fiscal year 2012 (ending March 2013). For the fiscal year 2013 (ending March 2014), the Bank forecasts inflation to remain at 1.8%.
Author: Ricardo Aceves, Senior Economist