"Inflation expectations are further confirmation that inflation pressures are very subdued and not an immediate concern for the RBNZ"
-Jane Turner, economist at ASB
Price pressure in New Zealand is expected to slowdown in the upcoming months, while growth expectations are perking up, according to a new survey released on Tuesday by the central bank in Wellington. The nation's inflation expectations tumbled to its lowest level in nearly fourteen years in the June quarter of 2013, mostly due to the fact business managers raised their expectations for economic growth, suggesting the central bank will not raise interest rate in the nearest future. Consumer price inflation is seen at 1.52% for this year and 2.06% in two years' time, estimate which is down from 1.68% and 2.17%, respectively, from the February survey. At the same time, expectations of annual economic growth picked up to 2.5% from 2.3% last quarter for this year, while forecast for the 2014 was revised to 2.8% compared with 2.6% projection made earlier.
"Inflation expectations are further confirmation that inflation pressures are very subdued and not an immediate concern for the RBNZ," said Jane Turner, economist at ASB. "From an inflation targeting perspective, this is a very comfortable position for the RBNZ to be in."
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