New Zealand’s inflation outlook stayed steady in the fourth quarter, signaling stability in price expectations as anticipation builds for a potential rate cut from the Reserve Bank of New Zealand (RBNZ) later this month. According to the RBNZ’s latest quarterly survey released on Tuesday, two-year inflation expectations—the period viewed as most influenced by monetary policy—remained unchanged at 2.28% from the previous quarter.
The result keeps inflation well within the central bank’s official target range of 1% to 3%, reinforcing views that inflationary pressures are easing after a period of heightened volatility. The survey, which gathered responses from 40 business leaders and professional forecasters, indicated that participants expect annual price increases to average 2.39% over the next year, a slight uptick from 2.37% in the previous quarter.
The findings come at a critical time for the RBNZ as it prepares for its next monetary policy meeting. Market analysts and investors are increasingly betting on a rate cut, citing subdued inflation expectations and signs of slowing economic growth. The central bank’s official cash rate (OCR) has remained elevated in recent months to curb persistent price growth, but recent data suggest that inflationary momentum may be easing enough to justify policy easing.
Economists note that stable inflation forecasts reflect growing confidence that the RBNZ’s tightening cycle has succeeded in anchoring long-term price stability. However, caution remains, as global economic uncertainties and domestic housing market trends could still influence inflation outcomes in the months ahead.
With inflation expectations anchored and rate cut speculation rising, all eyes are now on the RBNZ’s upcoming decision, which could signal a shift toward supporting growth while maintaining its inflation target.


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