Inflation data released overnight saw the headline CPI for the month of March hit expectations at 1.2%. Revisions saw the annual number to the end of March print slightly higher than anticipated at 8.5%.
Year-on-year New Zealand CPI is running at 5.9% to the end of the fourth quarter 2021, the highest in 30 years. With local GDP running at 3.1%, stagflation is a very real risk to the broader economy.
Of concern to the RBNZ, the monthly food price index was released yesterday and printed at 0.7% for the month of March. This gives an annual read of 7.4% for food inflation at the retail level. This data may have been the impetus for the 50bp hike instead of the more commonplace 25bp change.
Year-on-year New Zealand CPI is running at 5.9% to the end of the fourth quarter 2021, the highest in 30 years. With local GDP running at 3.1%, stagflation is a very real risk to the broader economy.
Of concern to the RBNZ, the monthly food price index was released yesterday and printed at 0.7% for the month of March. This gives an annual read of 7.4% for food inflation at the retail level. This data may have been the impetus for the 50bp hike instead of the more commonplace 25bp change.