Ahead of New Zealand’s CPI report due on Friday, Bloomberg is out with an editorial, highlighting a shift in the weightage towards the cost of home construction and rents after the latest review of the South Pacific island nation’s inflation gauge.
Key takeaways
“The housing and household utilities group will now account for 28% of the CPI, up from 24.5% previously, new weightings published by Statistics New Zealand show.”
“Residential rents now have a 10.3% weighting, up from 9.2%, and the cost of building a new home has an 8.7% weighting, up from 5.5%.”
“Transport will have a lower weight in the CPI than before, dropping to 11.9% from 14%, which largely reflects international airfares. The statistics agency is concerned that airfares will climb steeply as borders re-open, which could have an influence on the overall CPI movement that is far greater than reality.”
Market reaction
NZD/USD is on a corrective move lower amid deteriorating market sentiment and resurgent US dollar demand.
The spot was last seen trading at 0.6642, down 0.12% on the day.
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