March quarter annual Consumer Price Index (CPI) inflation declined for the fifth consecutive quarter coming in at 4.0%. A substantial decline in tradable inflation was the key dampening factor for overall inflation, while non-tradable inflation barely budged from the previous quarter and remains elevated.
Double-DippingSummary With a mild contraction in the September and December quarters, the New Zealand economy entered a double-dip recession.
The Reserve Bank of New Zealand Monetary Policy Committee decided to hold the line, keeping the Official Cash Rate at 5.5% and maintaining an Official Cash Rate outlook similar to its November forecasts.It appears the RBNZ now has a more balanced view on inflation pressures than its ultra-vigilant November statement and subsequent communications had led us to believe.
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