(Bloomberg) -- New Zealand two-year ahead inflation expectations crept higher, but remained near the midpoint of the central bank’s target band.
The measure rose to 2.12% in the fourth quarter from 2.03% in the third, the Reserve Bank said Monday in Wellington, citing its quarterly survey. One-year ahead expectations eased to 2.05% while the five-year view climbed to 2.24%.
The RBNZ began easing monetary policy in August saying weak domestic demand gave it confidence that inflation was returning toward the middle of its 1-3% target. It stepped up the pace of cuts last month, when it lowered the Official Cash Rate by 50 basis points to 4.75%, and most economists expect another 50-point reduction at the final rate decision of the year on Nov. 27.
Annual inflation slowed to 2.2% in the third quarter, returning to the target band for the first time in more than three years.
The RBNZ survey of business leaders and professional forecasters was sent out the day after the inflation data was published. It also asks questions about the OCR, economic growth and unemployment.
Respondents expect the OCR to fall to 3.33% by the end of the third quarter next year, the report showed. They expect the economy will grow 1.6% in the year through September 2025.
©2024 Bloomberg L.P.