RBNZ aims to raise rates further amid high inflation – UOB

UOB Group Economist Lee Chu Ann assesses New Zealand’s latest inflation figures.

Key Statements:

“The CPI rose 1.7% quarter-on-quarter in the first quarter of 2012, slightly below the 1.8% in the first quarter of 2022, but a 1.5% increase above expectations. Compared to the same period last year, the CPI advanced 7.3% year-on-year, an acceleration from 6.9% in the first quarter of 2022. Conclusion Beating expectations for a 7.1% reading.”

“Overall, the inflationary backdrop remains highly uncertain as global inflationary pressures intensify. While today’s readings may represent a spike, inflation is expected to be 5.9% this year (previously 5.5%), before easing to 2.4% in 2023.”

“There are three other monetary policy meetings this year: August 17, October 5 and November 23. The Reserve Bank of New Zealand (RBNZ) will raise rates by 50 basis points in August and again in October and November. This will bring the year-end OCR (reference interest rate) to 4.00 % (Previously 3.75%).”