New Zealand Inflation

New Zealand

New Zealand: Inflation slows down to one-and-a-half-year low in Q4

January 21, 2015

Consumer prices dropped 0.2% over the previous quarter in Q4 2014, coming in below the 0.3% price increase recorded in Q3. The reading came in below market expectations of a flat reading. According to the statistical institute, the print mainly reflected that lower prices for petrol and vegetables more than offset higher prices for international travel and housing-related items.

Annual headline inflation fell from 1.0% in Q3 to 0.8% in Q4, the lowest reading since Q2 2013. Consequently, inflation fell below the lower bound of the Reserve Bank of New Zealand’s 1.0%–3.0% target range.

According to its December Monetary Policy Statement, the Bank expects inflation to average 1.1% in 2015. In 2016, the Bank sees inflation averaging 1.7%. FocusEconomics Consensus Forecast panelists expect inflation to average 1.8% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel foresees that inflation will rise to 2.2%.


Author: Teresa Kersting, Economist

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New Zealand Inflation Chart


New Zealand Inflation Q4 2014

Note: Quarter-on-quarter and annual variation of consumer price index in %.
Source: Statistics New Zealand and FocusEconomics calculations.


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