Preview of NZ CPI, December quarter - Westpac

Analyst, Michael Gordon, at Westpac Baking Corporation, explained that they expect a 0.4% rise in the New Zeland Consumer Price Index for the December quarter this Friday, largely due to travel-related prices over the holiday period.

Annual inflation is expected to pick up to 1.8%, keeping it close to but just below the Reserve Bank's 2% target midpoint.

Key notes

• We expect a 0.4% rise in the Consumers Price Index (CPI) for the December quarter, with annual inflation lifting to 1.8%.
• Travel-related costs such as airfares and accommodation will account for much of the quarterly increase.
• We also expect stronger than average contributions from food, fuel and electricity prices, which contribute to the rise in the annual inflation rate.
• Our forecast is higher than the Reserve Bank’s estimate, though the difference is on the more transitory tradables side of the CPI.