New Zealand: Inflation moderates in Q2
Inflation declined to 3.3% in Q2 2024 from 4.0% in Q1 2024. Although the reading represented the lowest inflation since Q2 2021, it remained entrenched above the Central Bank’s 1.0%–3.0% target band. The largest contributors to the year-on-year increase in prices were housing and household utilities, transport, and alcoholic beverages and tobacco.
Meanwhile, consumer prices rose 0.4% from the previous quarter in Q2 2024, coming in below Q1 2024’s 0.6% rise.
On the monetary policy implications of the latest data, ANZ’s Sharon Zollner said:
“We have brought forward our forecast timing of the first 25bp cut in the Official Cash Rate (OCR) to November, rather than in February […] Q2 CPI data should alleviate the RBNZ’s concerns expressed in May about upside domestic inflation risks. While non-tradables did technically deliver a fifth consecutive upward surprise for the RBNZ (and us), it was small (0.1%pt) […]. There were plenty of details across the release showing inflation pressures are reducing.”