Analysts at ANZ note that New Zealand’s May ANZ Monthly Inflation Gauge rose 0.1% m/m (+2.3% y/y) in May and the monthly rise was driven by a small rebound in prices for accommodation services and domestic air transport (following their earlier seasonal decline) – together these contributed 0.09%pts to May’s monthly rise.
Key Quotes
“The purchase of housing added another 0.03%pts, and the seasonal lull in rents provided a small offset (after the student flurry), subtracting 0.01%pts.”
“Inflation in the ANZ Monthly Gauge has been losing momentum. In annual terms, the Gauge was up 2.3% in May, slowing from 3.2% in February when the Gauge was bolstered by respectable monthly gains in December and January.”
“This loss of momentum reflects cooling in inflationary pressures outside of housing.”
“We expect a gradual lift in wages will support a broadening in non-tradeable inflationary pressures in time, but there is little evidence of this currently. The RBNZ will remain cautious in this environment, with interest rates on hold for a while yet.”
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