February 28, 2024

New Zealand Policy Rate 5.5% (consensus 5.5%) in Feb-24

  • The Reserve Bank of New Zealand's decision to maintain the OCR at 5.50% is predicated on a strategic imperative to curb inflationary pressures amid a complex interplay of domestic capacity easing and sustained global economic challenges.
  • Global economic uncertainties, coupled with geopolitical and environmental risks, notably in shipping costs, present nuanced inflationary pressures that the MPC is poised to address through sustained restrictive monetary policy.
  • The ongoing assessment of fiscal policy impacts, alongside the vigilance towards domestic and global economic developments, will critically inform the MPC's future policy decisions, underscoring a commitment to steering inflation towards the target range while fostering economic stability.

January 23, 2024

New Zealand CPI Inflation 4.7% y-o-y (consensus 4.7%) in Q4-23

- New Zealand's CPI inflation rate was 4.7% year-on-year in Q4-23, slowing as expected from the previous quarter's rate of 5.6%.
- The Q4-23 inflation rate is 1.05 percentage points below the one-year average, but the 0.5% q-o-q rate annualises even lower and is close to the target.

November 29, 2023

New Zealand Policy Rate 5.5% (consensus 5.5) in Nov-23

  • The Reserve Bank of New Zealand's decision to keep the Official Cash Rate at 5.50% aligns with economic consensus, driven by a mix of domestic economic resilience, global economic slowdown, and persistent inflationary pressures.
  • Key future policy influences include domestic demand and housing market dynamics, global economic trends and their impact on exports and inflation, and labour market adjustments.
  • The MPC is balancing risks between potential domestic demand strength leading to greater inflationary pressure and a global economic slowdown that could ease these pressures, necessitating a continued restrictive monetary policy stance.

October 31, 2023

New Zealand Private Labor Cost Index 4.1% y-o-y (consensus 4.2%) in Q3-23

- The New Zealand Private Labor Cost Index grew by 4.1% year-over-year in Q3-23, the slowest growth rate since Q3-22 and a tenth under expectations.
- Private salary growth slowed to 0.82% quarter-over-quarter in Q3-23.