New Zealand’s latest RBNZ Survey of Expectations showed a sharp rise in near-term inflation expectations, reinforcing concerns that price pressures may remain elevated even as growth slows. One-year-ahead CPI inflation expectations jumped from 2.59% to 3.41%, while two-year expectations rose from 2.37% to 2.53%, moving further above the Reserve Bank of New Zealand’s medium-term inflation target midpoint.
The survey, conducted shortly after official data showed annual CPI inflation holding at 3.1% in Q1, also pointed to a more hawkish interest rate outlook. Respondents lifted their expectation for the Official Cash Rate at the end of the June quarter from 2.25% to 2.34%. The one-year-ahead OCR expectation rose sharply from 2.58% to 3.01%. The shift suggests markets increasingly believe the RBNZ may need to raise interest rates amid persistent inflation pressures.
At the same time, the survey revealed a softer growth outlook. Expectations for one-year-ahead real GDP growth fell from 2.03% to 1.58%, while the two-year outlook eased from 2.30% to 2.16%.
| Indicator | Previous | Latest |
|---|---|---|
| Annual CPI Inflation | 3.1% | 3.1% |
| 1-Year Ahead CPI Expectations | 2.59% | 3.41% |
| 2-Year Ahead CPI Expectations | 2.37% | 2.53% |
| 5-Year Ahead CPI Expectations | 2.31% | 2.22% |
| 10-Year Ahead CPI Expectations | 2.30% | 2.19% |
| OCR Expectation (End-Jun 2026) | 2.25% | 2.34% |
| 1-Year Ahead OCR Expectations | 2.58% | 3.01% |
| 1-Year Ahead GDP Growth Expectations | 2.03% | 1.58% |
| 2-Year Ahead GDP Growth Expectations | 2.30% | 2.16% |
