NZ: CPI rose 0.6% in June quarter – Westpac

Michael Gordon, senior economist at Westpac, notes that the New Zealand’s Consumer Price Index (CPI) rose by 0.6% in the June quarter, right in line with forecasts.

Key Quotes

“Almost half of the increase was due to short-term volatility in petrol prices, which were 5.8% higher on average over the quarter. Inflation pressures elsewhere remained modest. The annual inflation rate picked up from 1.5% to 1.7%.”

“Some of that was again due to higher fuel prices. But the various measures of core inflation also picked up a little, with most of them within a 1.5-1.7% range.”

“There is a consistent message coming through: inflation remains firmly within, but in the lower half of, the Reserve Bank’s 1-3% target range. A sustained move towards the 2% midpoint of the target would require stronger economic growth from here.”

“Annual inflation remains within, but at the lower end of, the Reserve Bank’s target range. – A further OCR cut at the August review remains likely.”