RBNZ inflation expectations rise higher again

From the Reserve Bank of New Zealand Survey of expectations - re inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term

• One year expectations 4.86%
• 2 year 3.07%

Summary:

• According to the survey, the Official Cash Rate (OCR) is expected to rise 50 basis points this quarter to 3.0%.

• OCR expected to be at 3.5% at the end of the June 2023 quarter.

• Annual GDP growth expected to be 1.49% in the next year, but expected to rise to 1.89% in the following year.

• One-year-ahead, and two-year-ahead inflation expectations declined to 4.86% and 3.07%, respectively.

• Long-term inflation expectations remain anchored close to the midpoint of the RBNZ’s target band range of 1 – 3%.

• One-year-ahead unemployment expectations rise to 3.77%, an increase from the current unemployment rate of 3.3%.

The commentary from the RBNZ (summarised above) show the Bank is comfortable with inflation expectations. Although 1 and 2 year are both rising above the upper limit of the 2 to 3% target band the RBNZ say longer term expectations are close to the midpoint of the band.