New Zealand inflation to linger below 2%? - Westpac

Analysts at Westpac explained that global inflation is rising, and consumer price inflation in New Zealand is set to pick up over the coming year. 

Key Quotes:

• "However, a sustained lift in inflation to levels close to the RBNZ's 2% target mid-point is still looking elusive."
• "Several long lasting factors will continue to dampen inflation over the next few years."
• "Consequently, a sustained return to levels close to the RBNZ’s 2% target mid-point looks elusive."
• "Pressure on retail margins is continuing to weigh on tradables inflation."
• "There are also a number of administered prices, such as tertiary education costs, that are likely to be subdued over the next few years."
• "Inflation expectations have fallen, reinforcing the more general softness in consumer price inflation."
• "In light of these factors, we expect that the RBNZ will remain on hold until the final quarter of 2019."