The consumers price index (CPI) fell 0.5 percent in the June 2020 quarter as the COVID-19 global pandemic saw cheaper petrol and falling hotel and motel prices, Stats NZ said today.
It was the first fall in quarterly inflation since the December 2015 quarter when there was also a drop of 0.5 percent.
Consumer Price Index for New Zealand arrived as follows:
NZ CPI
NZ quarter 2 (Q2) consumer price index non-tradables 0.0 pct vs pvs Q.
Consumer price index -0.5 pct vs pvs Q (Reuters poll -0.5 pct).
Consumer price index non-tradables +3.1 pct vs a year ago.
Consumer price index +1.5 pct vs year ago (Reuters poll +1.5 pct).
The print was already priced into the bird.
"The RBNZ will be more focused on the longer-term outlook for inflation, but that isn’t looking great either, especially with the exchange rate a headwind,"
analysts at ANZ Bank argued.
Meanwhile, “the COVID-19 pandemic has created a lot of volatility and uncertainty,” prices senior manager Aaron Beck said.
“These have resulted in some large price fluctuations as well as several measurement challenges.”
Petrol prices fell 12 percent over the quarte which was the biggest quarterly fall in petrol prices since the December 2008 quarter.
“Global crude oil prices fell sharply over the first four months of 2020 reaching a low point in April,” Mr Beck said.
“International lockdown restrictions and global economic uncertainty have greatly reduced international demand for crude oil, driving prices down at the pump.”
Kiwi update
Muted on the release...trades at 0.6572 within quiet early Asian market 11 pip range.
'The NZD benefited from broad underperformance of the USD, driven by improved risk sentiment, amid optimism around the COVID-19 vaccine trials.
While this optimism may be short-lived, the overall outlook for the USD is not that supportive given the continued rise in virus cases and risks around another fiscal stimulus deal,' analysts at ANZ Bank explained.
Description
Consumer Price Index released by the Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services .
The purchase power of NZD is dragged down by inflation.
The CPI is a key indicator to measure inflation and changes in purchasing trends.
A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative.
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