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New Zealand CPI inflation 6.0% y-o-y (consensus 5.9) in Q2-23

- New Zealand's CPI inflation reached 6.0% year-on-year in Q2-23, slightly surpassing the consensus forecast of 5.9%. This represents the lowest growth since Q4-21.
- Quarter-on-quarter CPI inflation increased by 1.1% in Q2-23, exceeding the consensus forecast of 0.9%, indicating ongoing inflationary pressures.

RBNZ: Jul-23

• The Monetary Policy Committee's (MPC) decision to hold the Official Cash Rate (OCR) at 5.5% reflects a commitment to restrain inflation and sustain maximum employment, signaling a likely continuation of this restrictive interest rate level in the foreseeable future.
• Future MPC decisions will be shaped by global economic growth trends, especially monetary policy tightening by central banks internationally and economic conditions in key trading partners like China.
• Domestic factors such as declining inflation expectations, easing of capacity constraints, reduced labour market pressures, and lower house prices, along with mortgage rate trends, will also significantly influence future MPC decisions.

New Zealand PMI manufacturing 47.5 in Jun-23

- The New Zealand PMI manufacturing index for June 2023 contracted, reaching a reading of 47.5, the lowest level since August 2021.
- The PMI decrease of 2.41 points below the one-year average indicates a significant decline in manufacturing performance compared to recent times.

RBNZ: May-23

• The New Zealand economy is experiencing a slowdown in domestic economic activity and contraction, mainly due to tightening monetary conditions and an evolving housing market, compounded by global trade disruptions.
• The Monetary Policy Committee has increased the Official Cash Rate from 5.25% to 5.50% to control inflation and support sustainable employment, given the current economic conditions and potential inflationary pressures.
• Interest rates are expected to remain at a restrictive level for the foreseeable future, reflecting the ongoing efforts to manage inflation and support economic stability and growth.