New Zealand’s CPI in the first quarter of 2024 is expected to be higher quarterly than in the final quarter of last year – overview

New Zealand’s January-March quarter CPI is due at 10:45 p.m. GMT, or 6:45 p.m. US Eastern Time.

Excerpt previews:

BNZ:

• Following the release of partial March inflation estimates on Friday, we revised down our forecasts for first quarter headline CPI to 0.6% q/q and 3.9% on an annual basis. Although this figure is higher than the RBNZ’s forecasts (0.4% q/q and 3.8% y/y), the Bank noted that recent price increases are mainly due to volatile elements of the review of the April monetary policy.

KiwiBank:

• Price growth likely accelerated in the quarter, up 0.8% from 0.5%. However, on an annual basis, we expect inflation to fall from 4.7% to 4.2%.

ASB:

• Our pick for the CPI is a quarterly increase of 0.7% in the overall CPI in the first quarter, above expectations from the February MPS. It is important to note, however, that the general slowdown in annual inflation is expected to continue, with annual headline inflation falling to 4.1%, its lowest level in almost three years.
• Annual core inflation rates are also expected to slow. We expect the decline in tradable goods inflation to continue to be the main driver of the slowdown in headline inflation. Slowing global goods inflation is weighing on tradable goods prices, with lower fuel prices also impacting quarterly results. On the other hand, non-tradable goods inflation remains persistent, with a solid quarterly figure of 1.2% forecast. Even if a 6.5% increase in tobacco prices will be largely ignored.
• We still expect headline inflation to return below 3% by Q3 24. But uncertainty over the inflation outlook remains high. Ongoing upside risks, particularly those related to tradable inflation, suggest the RBNZ will continue to err on the side of caution. We do not expect a rate cut until November 2024.

Westpac:

• Q1 CPI will show domestic forces driving prices, with headline and underlying rates still above the RBNZ midpoint (Westpac f/c: 4.2% p.a., market f/c: 4 .0% per year).

This article was written by Eamonn Sheridan at www.forexlive.com.

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