NZ: Headline CPI likely rose 0.3% in the March quarter - ANZ

ANZ analysts are expecting New Zealand’s headline CPI to surge 0.3% in the March quarter, with annual inflation slipping from 1.9% to 1.7%.

Key Quotes

“Tradable inflation is expected to print at -0.6% q/q, while non-tradable inflation is expected to post a 1.1% q/q rise. We expect that measures of core inflation will track broadly sideways.”

“CPI in line with our expectations would add to the case that a cut in the OCR is not a matter of urgency. The RBNZ would likely take some comfort from stronger domestic inflation (lifting from 2.7% y/y to 2.8%), with weakness concentrated in the relatively volatile and transitory tradable component. However, the medium-term outlook for domestic inflation remains troubling.”

“The RBNZ needs to see accelerating GDP growth to achieve a sustained lift in inflation, and we expect that by August it will be clear that an OCR cut is required to support this.”