NZ: CPI likely to rise by 0.2% in March quarter - Westpac

Michael Gordon, senior economist at Westpac, expects a 0.2% rise in the New Zealand’s Consumer Price Index (CPI) for the March quarter, which would see annual inflation slow from 1.9% to 1.6%.

Key Quotes

“The sharp drop in fuel prices at the end of last year is entirely responsible for the slowdown. We expect measures of underlying inflation to hold steady.”

“The CPI release will be crucial ahead of the Reserve Bank’s next Monetary Policy Statement. A result in line with or below expectations would support our forecast of an OCR cut in May.”

“However, a substantial upside surprise would make a May OCR cut a more marginal prospect.”