Survey shows inflation expectations falling – good news for RBNZ

The RBNZ’s January quarter Expectations Survey shows business leaders’ and professional forecasters’ inflation expectations are continuing to drop and move closer to the RBNZ 2% target.

On average, the 38 people surveyed see the annual inflation rate falling to 3.22% from 4.7% by this time next year and 2.5% by early 2026.

Westpac senior economist Satish Ranchhod says it should reinforce the case for an ‘on-hold’ decision at the RBNZ’s policy meeting this month.

A closer look at the survey shows expectations for inflation two years ahead dropped by 2.5%, down from 2.76% last quarter. These are the lowest readings since 2021 and follow the decrease in actual inflation over the past few months.