Analysts at ANZ point out that New Zealand’s June quarter inflation was stronger than they expected at both the headline level and in spirit, with measures of core inflation clearly ticking a little higher.
Key Quotes
“With that in mind, now is a useful time to revisit where we see inflation heading from here and the key judgements underpinning this view. We expect headline inflation to gradually pick up to 2% by Q2 2019. In light of the Q2 surprise, this is one quarter earlier than our previous forecasts.”
“Underpinning this is an ongoing gradual acceleration in non-tradables inflation, and some near-term strength in tradables inflation. On balance, the risks to this outlook are skewed a little to the upside in the near term, but to the downside in the medium term, reflecting a deceleration in economic activity. This week is quiet on the data front, with just trade data and ANZ Consumer Confidence out.”
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