On April 19, New Zealand’s first-quarter CPI data released tomorrow may show that inflationary pressures have weakened further.
The Federal Reserve Bank of New Zealand had previously forecast a 1.8% quarter-on-quarter increase in CPI in the first quarter, an acceleration from 1.4% in the fourth quarter of last year, which would bring annual inflation back to 7.3%, on par with the high in the second quarter of 2022.
But analysts believe that the upcoming CPI data will surprise the Reserve Bank of New Zealand, which is expected to rise by 1.3% quarter-on-quarter, bringing the annual inflation rate down to 6.7%.
The weaker-than-expected data could prompt the Reserve Bank of New Zealand to revisit its hawkish stance on interest rates at its next policy meeting.
Stable oil prices throughout the first quarter should help keep headline inflation figures in check, while domestic and international airfares are likely to soften as well.