New Zealand: Inflation hits two-year high in Q4 2013
January 21, 2014
Consumer prices rose 0.1% over the previous quarter in Q4 2013, which came in below 0.9% increase observed in Q3 2013. The reading overshot market expectations of a 0.1% fall. According to the statistical institute, an increase in air fares and housing prices offset lower prices for fresh food.
As a result of the quarterly increase, annual headline inflation rose from 1.4% in Q3 to 1.6% in Q4, which marked the highest reading since Q4 2011. Inflation sits within the Reserve Bank of New Zealand's 1.0%-3.0% target range. In the full year 2013, inflation was 1.6%, which came in above the 1.0% observed in 2012.
According to its December Monetary Policy Statement, the Reserve Bank of New Zealand expects inflation to average 1.5% in 2014. In 2015, the Bank sees inflation averaging 1.9%. FocusEconomics Consensus Forecast panelists expect inflation to average 2.0% in 2014, which is unchanged from last month's forecast. For 2015, the panel anticipates that inflation will rise to 2.3%.
Author: Ricardo Aceves, Senior Economist