BNZ forecasts Q2 inflation at 4.1% year-on-year, above the Reserve Bank’s 3.9% projection, fueling rate hike expectations.
New Zealand’s second-quarter inflation is expected to print at 4.1% year-on-year, surpassing the Reserve Bank of New Zealand’s (RBNZ) 3.9% forecast. The projection reinforces expectations for further monetary tightening amid persistent price pressures.
The RBNZ had revised its Q2 forecast down to 3.9% in July from 4.2% in May, while market pricing sits at 4.0% year-on-year. Fuel prices are anticipated to drive tradeable inflation to 4.7%, with core measures remaining above the RBNZ’s target midpoint.
A higher-than-expected print could widen NZ-global rate spreads and support the New Zealand dollar, while a downside surprise in core inflation may temper hawkish repricing.