NZ inflation expectations remain steady in a latest RBNZ survey

Inflation expectations in New Zealand remained steady in the latest quarterly survey conducted by the Reserve Bank of New Zealand, suggesting little prospects of a rise in prices in the near term, after remaining below the central bank’s target rate for eight straight quarters.

Expectations for New Zealand's consumer-price gains for the next 12 months rose slightly to 1.26 percent from 1.22 percent in the second quarter, survey data released by AC Nielson showed Tuesday.

The central bank is required to keep inflation within a 1-3 percent target range, while aiming for near 2 percent. As a result, the survey is closely watched for any clues on where inflation might head over the near and medium term. New Zealand's annual inflation rate is currently 0.4 percent, data showed.

Further, the survey shows inflation of 0.34 percent is expected this quarter, little changed from 0.33 percent three months ago, before slowing to 0.27 percent next quarter. Tradable inflation, which includes goods and services that compete with imported rivals, actually fell 1.5 percent in the second quarter from a year earlier.

The survey shows gross domestic product is seen rising 0.66 percent in the current quarter and growing 2.52 percent one year out and 2.42 percent two years out. That's a faster trajectory than was seen three months ago, when the survey had growth in the quarter of 0.59 percent, one-year-out growth of 2.24 percent and two-year-out growth of 2.33 percent.

Meanwhile, the Reserve Bank of New Zealand meets next week and is widely expected to cut the official cash rate to 2 percent from its current setting of 2.25 percent.