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NZ September quarter CPI likely to rise 0.6 pct, slightly above RBNZ’s estimate: Westpac Research
New Zealand’s consumer price inflation for the September quarter of this year is expected to rise 0.6 percent, slightly above the Reserve Bank of New Zealand’s (RBNZ) estimate, according to the latest report from Westpac Research.
Much of the expected rise in consumer prices over the quarter comes from seasonal items: food, domestic airfares and local body rates. Overall, our forecast equates to a 0.4 percent rise in seasonally adjusted terms – consistent with annual inflation running in the lower half of the Reserve Bank’s 1-3 percent target range.
Food prices rose by 1.3 percent for the quarter, led by gains in vegetables and meat. The latter was boosted by the outbreak of African Swine Fever in China, which has squeezed global supplies of pork and created a new demand for other proteins.
There was also a notable rise in prices for dining out, which may have been a delayed response to the large minimum wage hike in April, the report added.
Petrol prices were about 1 lower on average over the September quarter. That contrasts with a sharp rise in prices a year ago, which was compounded by the introduction of Auckland’s regional petrol tax. This difference, along with the smaller increase in local body rates, accounts for all of the expected drop in the annual inflation rate.
"In contrast, tradables inflation is expected to stay in negative territory, as global inflation pressures remain subdued. The recent fall in the New Zealand dollar will give import prices a modest boost, with the impact on consumer prices most likely to come through in the first half of next year," Westpac Research further commented in the report.