New Zealand: Inflation stabilizes in first quarter
April 17, 2013
In the first quarter, consumer prices jumped 0.4% over the previous period, which contrasts the 0.2% drop registered in the final quarter of 2012. The result, nonetheless, fell short of market expectations, which had consumer prices rising 0.5%. According to Statistics New Zealand, the reading particularly reflects higher prices for cigarettes and tobacco, due to a 10.9% increase in excise duty in January.
As a result, annual headline inflation remained unchanged at the 0.9% rate recorded in the fourth quarter. At the current level, inflation remains below the Central Bank's inflation target range of 2.0% plus/minus one percentage points.
The Reserve Bank of New Zealand expects inflation to average 1.4% in the fiscal year 2013/14 (ending March 2014). For fiscal year 2014/15, the Bank anticipates inflation to average 1.8%. FocusEconomics Consensus Forecast panellists expect inflation to average 1.7% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, the panel anticipates that inflation will rise to 2.3%.
Author: Ricardo Aceves, Senior Economist