UOB Group economist Lee Sue Ann assesses the latest inflation figures for New Zealand.
Key Statements:
“The CPI rose 1.7% quarter-on-quarter in the first quarter of 2012, slightly less than the 1.8% in the first quarter of 2022, but above expectations of a 1.5% increase. Compared with the same period of the previous year , the CPI advanced 7.3% year-on-year, an acceleration from 6.9% in the first quarter of 2022. The result also beat expectations for a 7.1% reading.”
“Overall, the inflation backdrop is highly uncertain as global inflation pressures remain intense. Although today’s readings could represent a spike, we now expect inflation to hit 5.9% for this year (vs 5.5% prior) , before relaxing to 2.4% in 2023.”
“There are three other monetary policy meetings for this year: August 17, October 5 and November 23. Now we see that the Reserve Bank of New Zealand (RBNZ) will raise rates by 50 basis points in August and again in October and November, which will bring the OCR (reference interest rate) to 4.00% at the end of the year (3.75% previously).”
Source: Fx Street
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