Next Wednesday's New Zealand CPI release will be dominated by the steep fall in fuel prices, which began late last year and really kicked into gear over the New Year period.
A 0.3% drop is expected in the CPI over the March quarter, which would take annual inflation down from 0.8% to 0.2%. This would be the slowest pace since 1999, when annual inflation briefly dipped below zero.
"We estimate that petrol pump prices were down 11% on average over the quarter (and diesel prices were down 17%). The drop in fuel prices equates to a 0.6 percentage point fall in the CPI - that is, it accounts for all the slowdown in annual inflation that we're expecting", Says Westpac NZ
