New Zealand Inflation

New Zealand

New Zealand: Inflation slows down to over one-year low in Q3

October 23, 2014

Consumer prices rose 0.3% over the previous quarter in Q3, matching the result tallied in the two previous quarters. The reading came in below market expectations of a 0.5% price increase. According to the statistical institute, the print mainly reflect higher housing-related prices, which are adjusted annually by local authorities.

Annual headline inflation fell from 1.6% in Q2 to 1.0% in Q3, the lowest rate since Q2 last year. Consequently, inflation now rests at the lower bound of the Reserve Bank of New Zealand’s 1.0%–3.0% target range.

According to its September Monetary Policy Statement, the Bank expects inflation to average 1.4% in 2014. In 2015, the Bank sees inflation averaging 1.7%. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2014, which is down 0.1 percentage points from last month’s forecast. For 2015, the panel anticipates that inflation will rise to 2.2%, which is also down 0.1 percentage points from last month’s projection.

Author: Teresa Kersting, Economist

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