Capital Economics: New Zealand CPI Data Not Enough to Alarm the Reserve Bank of New Zealand

Golden Ten Data, July 21｜Capital Economics economist Abhijit Surya stated that the rise in price pressures within New Zealand's economy in the second quarter was not particularly broad, and core inflation indicators remained favorable. He added that, therefore, the Reserve Bank of New Zealand does not have sufficient reason to significantly raise interest rates. He noted that the increase in overall indicators can be almost entirely attributed to tradable goods inflation, which surged from 2.5% to a three-year high of 4.9%. He further added that, despite the ugly headline inflation data, these figures will not give the Reserve Bank of New Zealand a sense of urgency for consecutive rate hikes.