New Zealand Inflation Declines

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New Zealand Inflation Declines

New Zealand Inflation Declines To 2.2% In Q3

According to official data from Statistics New Zealand, the inflation levels have finally returned within the acceptable range set by the RBNZ.

The Central Bank of New Zealand had set a range of 1 - 3% for inflation during Q3. At the same time, the bank was ready to cut the rates at an aggressive pace.

Rbnz To Cut Policy Rate

Now, the data released on Wednesday shows that annual inflation in New Zealand has declined to just 2.2% during the Q3. That's within the range set forth by the RBNZ and shows major progress.

If we look back, the reading during Q2 was 3.3%, while June 2022 showed a high reading of 7.3%. Based on these past values, it becomes clear that a lot of progress has been made in this regard.

According to a chief economist, there's still a lot to do, but the RBNZ can finally declare its victory against inflation. They added that it has become clear that the inflation problem has been brought under control as the cost pressures have gone down.

Right now, the RBNZ policy is still very restrictive but the inflation report has sparked hopes that rate cuts will be coming in the near future.

New Zealand's CPI jumped by 0.6% during the Q3 when compared with the previous quarter. The forecast was for a rise of around 0.7% q/q and around 2.2% y/y. Similarly, the RBNZ had also set a target of 2.3% inflation y/y.

After the release of the data, the NZD remained unfazed as the inflation report was within the forecasted range.

Since August 2024, RBNZ has cut the rates by 0.75% after reports that the inflation is returning back to the acceptable range.

Experts believe that the rate cuts by the RBNZ will continue and may even pick pace as the inflation has returned back into an acceptable range. These rate cuts by the RBNZ will play a key role in stimulating growth.

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