ANZ note that the latest CPI data from New Zealand, released this week, was lower but due to the composition "we aren’t expecting these data to materially change the RBNZ’s inflation outlook."

  • tradables disinflation continues to bring down headline inflation
  • But given the volatility, the RBNZ needs to see more progress on non-tradables inflation to be confident overall inflation is returning to target in a sustainable timeframe
  • The RBNZ’s Q1 Survey of Expectations was also out this week ... While 1yr ahead inflation expectations fell from 3.60% to 3.22%, that is 0.7%pts higher than the RBNZ’s inflation forecast for 1 year ahead, with the RBNZ expecting annual inflation to be comfortably back in the 1-3% target band by year end.
  • We are not discounting the progress in this week’s data, but in the context of an impatient Monetary Policy Committee with no tolerance for delays in the return of inflation to target, these data certainly weren’t a ‘slam dunk’ to rule out the need for further increases to the OCR

ANZ expect more rate hikes from the Reserve Bank of New Zealand:


rbnz ocr 16 February 2024 2