"There were signs of a more cautious attitude towards spending in the latest consumer confidence survey. Higher petrol prices may be playing a role here, by leaving less disposable income in consumers' pockets."
- Dominick Stephens, Westpac Chief Economist
New Zealand consumers are more cautious in the third quarter rather than 3 months earlier, as higher petrol prices and increasing interest rates are weighing on consumers mood. According the Westpac Banking Corporation, a gauge of consumer morale slowed to 115.4 in the third quarter, edging lower down from 116.6 a quarter earlier, however, still remaining at a high level. Any reading above 100 indicates the number of positive consumers outweighs those that have pessimistic view. Figures also showed fewer kiwis are suggesting it is an appropriate time to buy a major household item, suggesting more consumers will increase their saving rather than show willingness to make huge purchases.
A week earlier the Reserve Bank of New Zealand made no adjustments to its monetary policy, leaving the key rate at 2.5% and pointed at possible tightening in policy next year. The RBNZ Governor Graeme Wheeler said that additional stimulus may be needed to curb the inflation that is expected to hover around 2% in 2014 in case housing pressure spill into consumer prices. Amid rising mortgages consumers are expected to have their disposable income chipped away, and taking into account possible increase in interest rates, people are worried about their future finance. Despite certain challenges the New Zealand's economy is likely to accelerate to 3% by the September quarter, and gain momentum further by the middle of the next year, reaching 3.5%.
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