New Zealand 2-Year Inflation Expectations at 2.28%

The Reserve Bank of New Zealand’s (RBNZ) quarterly survey of expectations showed that business managers forecast inflation at 2.28% for the next two years in Q4 2025, unchanged from the previous three-month period. Meanwhile, one-year inflation expectations edged up slightly to 2.39% from 2.37%, suggesting that price pressures are expected to stay contained in the near term. Longer-term views were mixed, with five-year-ahead inflation expectations easing to 2.22% from 2.26%, while ten-year expectations inched higher to 2.18% from 2.15%. In terms of monetary policy, respondents now expect the Official Cash Rate (OCR) to stand at 2.25% by the end of December 2025, notably lower than the 3.02% forecast in the previous quarter, before rising modestly to 2.31% by September 2026. The adjustment follows the RBNZ’s recent decision to cut the OCR by 50 basis points to 2.50% on 8 October 2025.

The Reserve Bank of New Zealand's (RBNZ) quarterly survey of expectations showed that business managers forecast inflation at 2.28% for the next two years in Q3 2025, edging down from 2.29% in the previous three-month period. Additionally, one-year inflation expectations eased to 2.37% from 2.41%. Meanwhile, longer-term projections showed that five-year-ahead inflation expectations increased to 2.26% from 2.18%, while ten-year expectations remained unchanged at 2.15%. As for interest rates, respondents forecast the Official Cash Rate (OCR) to be at 3.02% by the end of the September 2025 quarter, declining further to 2.86% by the end of the June 2026 quarter.

The Reserve Bank of New Zealand’s (RBNZ) quarterly survey of expectations revealed that business managers now see inflation averaging 2.29% over the next two years as of Q2 2025, up from 2.06% in the previous quarter—the highest in a year. One-year inflation expectations also rose to 2.41% from 2.15%r—the highest in four quarters. Longer-term projections showed five-year-ahead inflation expectations edging up to 2.18% from 2.13%, while 10-year expectations increased to 2.15% from 2.07%. As for interest rates, respondents forecast the Official Cash Rate (OCR) to stand at 3.77% by the end of Q1 2025, before declining to 3.23% by year-end.