Survey heads in right direction for OCR cut
As the central bank heads toward another OCR decision next week, the two-year expectation for future inflation dropped to 2.28% from 2.29% in the last quarter, which was up from 2.06% in the February survey.
This time frame is the one the RBNZ watches most closely as it mulls whether to lower or raise the OCR.
It is heavily predicted by economists to lower the OCR to 3% next week and another 0.25% before the end of the year as economic indicators soften and inflation remains at the top end of its 1-3% target.
The survey of 40 business leaders and professional forecasters by Research New Zealand on behalf of the RBNZ shows one-year inflation expectations declined to 2.37% from 2.41% while five-year-ahead expectations increased to 2.26% from 2.18% in the last quarter. The ten-year-ahead inflation expectations were unchanged at 2.15%.
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