New Zealand: Inflation slows down slightly
April 16, 2014
Consumer prices rose 0.3% over the previous quarter in Q1 and came in slightly above the 0.1% increase observed in Q4 2013. The reading undershot market expectations of a 0.5% price increase. According to the statistical institute, higher tobacco and housing prices were partly compensated for by lower prices for international air fares, vegetables, and package holidays.
Contrasting the quarterly increase, annual headline inflation declined slightly from 1.6% in Q4 to 1.5% in Q1. Inflation still remains well within the Reserve Bank of New Zealand's 1.0%-3.0% target range.
According to its March Monetary Policy Statement, the Bank expects inflation to average 1.7% 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: Armando Ciccarelli, Head of Data Solutions