Cameron Bagrie, Chief Economist at ANZ bank noted his afterthoughts on New Zealand’s monthly inflation gauge.
“Prices from the Gauge rose 0.3% in December1 and are up 2.3% y/y.”
“The largest contributions came from rents, purchase of housing and accommodation services.”
“We are starting to detect more broad-based gains with prices in six of the eight major groups increasing.”
“Nonetheless, inflation signals are showing signs of aligning with strength across the economy and diminishing capacity. “
“With momentum across the economy strong and spare capacity being absorbed, the inflation pulse is likely to beat a tad faster. With that comes the reality that the OCR will not stay this low indefinitely.”