New Zealand Inflation Expectations Rise in Latest Survey

New Zealand Inflation Expectations Rise in Latest Survey

On May 16, 2025, the Reserve Bank of New Zealand (RBNZ) released its quarterly Survey of Expectations, shedding light on the country’s economic outlook. The closely watched two-year inflation expectations reached 2.29%, up from the previous quarter’s 2.06%, marking the highest level in a year. This figure, published today, reflects growing confidence among business leaders and economists that price pressures will remain elevated in the near term, staying close to the upper end of the RBNZ’s 1-3% target band.

The survey, conducted in late April and released at 3:00 a.m. UTC on May 16, 2025, also showed one-year inflation expectations reaching 2.83%, compared to 2.51% in the prior quarter. This shift suggests businesses anticipate stronger price growth, potentially driven by persistent global supply chain challenges and domestic demand. The RBNZ’s data, shared today, aligns with market sentiments observed in posts on X, where analysts noted the figures could reduce expectations for imminent rate cuts. Meanwhile, the official cash rate (OCR) is expected to reach 3.20% by June 2025, with forecasts pointing to a gradual decline to 2.91% by mid-2026.

Today’s release has sparked discussions about the RBNZ’s next moves, with the central bank’s upcoming meeting later this month in focus. While the 2.29% two-year expectation signals inflationary pressures, some economists argue the RBNZ may maintain its cautious stance, balancing growth and price stability. The New Zealand dollar saw modest gains following the announcement, reflecting market reactions to the data published on May 16, 2025. As global economic uncertainties linger, this survey offers critical insights for investors and policymakers navigating New Zealand’s economic landscape.