New Zealand’s ANZ Monthly Inflation Gauge falls 0.3 pct m/m in February, 3.1 pct higher than a year ago

New Zealand’s ANZ Monthly Inflation Gauge fell 0.3 percent m/m in February to be 3.1 percent higher than a year ago. Changes to tertiary education costs as a result of the Tertiary education fees free policy are included in this month’s gauge.

The fall in tertiary education costs had the biggest impact of the subcomponents in the Gauge (-0.34 percentage point contribution). A third of the 36 subcomponents rose in the month, with the biggest contributors being rents and purchase of housing (+0.12 percentage point and +0.04 percentage point respectively).

Of the five subcomponents that fell, seasonal falls in domestic air transport (-0.09 percentage point) and accommodation (-0.06 percentage point) were the largest contributors, outside of education. Despite the Gauge recording decent upward momentum at present it does not suggest that a sustained lift in inflation is around the corner.

"We estimate tertiary education costs fell 18 percent. Without this, this subcomponent would have increased 2 percent m/m and the overall Gauge would have increased 0.1 percent m/m," ANZ Research commented in its latest report.

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