ANZ Chief Economist Sharon Zollner (pictured above) noted that while New Zealand’s economy remains sluggish, there are encouraging signs.
“The economy is clearly still very weak, but things are starting to turn higher,” Zollner said.
Inflation expectations decline
One of the most positive outcomes of the survey is the decline in inflation expectations, which dropped from 2.8% to 2.5%. Firms’ pricing intentions also fell slightly, with 42% planning to raise prices in the next three months, down from 44%.
“Inflation expectations are getting steadily closer to the magic 2% mark,” Zollner said.
Business inflation expectations are falling faster than consumer expectations, which remain near 4%. This shift could stabilise price-setting behaviours and align them with the Reserve Bank’s (RBNZ) inflation targets.
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