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20 Apr 2015
NZ inflation might drop 0.3% in the March quarter – Westpac
FXStreet (Barcelona) - The Team at Westpac expects the impact of falling oil prices to lead New Zealand’s CPI to drop by 0.3% over the March quarter.
Key Quotes
“We expect a 0.3% drop in the CPI over the March quarter, which would take annual inflation down from 0.8% to 0.2%. This would be the slowest pace since 1999, when annual inflation briefly dipped below zero.”
“The sharp fall in fuel prices accounts for all of the expected slowdown in the annual inflation rate. However, underlying inflation pressures are likely to have remained subdued too, as a result of low wage growth and the still-high New Zealand dollar.”
“The RBNZ will look through the direct impact of a one-off fall in fuel prices, but its concern is around the risk of consumers and business falling into a sustained low-inflation mindset.”
Key Quotes
“We expect a 0.3% drop in the CPI over the March quarter, which would take annual inflation down from 0.8% to 0.2%. This would be the slowest pace since 1999, when annual inflation briefly dipped below zero.”
“The sharp fall in fuel prices accounts for all of the expected slowdown in the annual inflation rate. However, underlying inflation pressures are likely to have remained subdued too, as a result of low wage growth and the still-high New Zealand dollar.”
“The RBNZ will look through the direct impact of a one-off fall in fuel prices, but its concern is around the risk of consumers and business falling into a sustained low-inflation mindset.”