ANZ analysts note that New Zealand’s two-year-ahead inflation expectations dipped further below 2% in Q4, coming in at 1.80%, the lowest level since late-2016.
Key Quotes
“Long-term inflation expectation measures were stable near 2%.”
“Across other elements of the survey, GDP growth expectations one- and two-years ahead were broadly stable near 2.15%. House price inflation expectations rose. In one year’s time, the OCR is expected to be at 0.61%.”
“The RBNZ will be concerned that inflation expectations have fallen further below 2%, despite the OCR cuts so far this year. The RBNZ’s survey supports our call for an OCR cut tomorrow and further cuts next year.”
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