New Zealand business expectations for inflation fell to a 13-year low in November, adding to the case for benign price pressure that may prolong a period of record-low interest rates, according to a private survey.
Annual inflation will be 2.24 percent in a year, down from a 2.36 percent outlook in October and the lowest since October 1999, ANZ Bank New Zealand Ltd. said in a report today. A net 16.9 percent of firms expect to raise prices in the next three months, it showed.
“Inflation gauges remain tame,” Cameron Bagrie, chief economist at ANZ Bank in Wellington, said in the report. “Such inflation tones augur well for interest rates remaining low.”
Central bank Governor Graeme Wheeler next week will keep the official cash rate unchanged at a record-low 2.5 percent, where it has been since March last year, according to all 16 economists in a Bloomberg survey.
Business confidence rose from October, ANZ Bank’s survey of 464 companies showed. Profit expectations and intentions toward hiring and investment all improved, Bagrie said. Exporters are still “timid,” with a net 17.5 percent expecting overseas sales to improve, he said.
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