Distance between inflation and RBNZ’s target narrows
The central bank’s recent Monetary Policy Review highlighted growing confidence in the medium-term inflation outlook.
Bank economists are expecting to see a fall in the CPI on Wednesday, with Westpac predicting 3.5%, the top of the range, Kiwibank 3.4% and ANZ and ASB 3.3%. Westpac is nearer the Reserve Bank’s (RBNZ) May estimate of 3.6%, when its last Monetary Policy Statement was delivered.
The RBNZ’s next Monetary Policy Statement will be released in August when economists are expecting a much better steer on the OCR path.
Inflation peaked at 7.3% in June 2022 and in the March quarter this year fell to 4%, which is still outside the RBNZ’s target range of 1-3%, but Kiwibank senior economist Mary Jo Vergara says it isn’t just about the CPI’s headline number, the underlying trend is more important.
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