New Zealand 2-Year Inflation Outlook Falls to 2.34%

The Reserve Bank of New Zealand’s (RBNZ) quarterly survey of expectations showed that business managers expect inflation to slow to 2.34% over the next two years in Q3 2026, down from 2.53% in the previous period, marking the lowest reading since Q4 2025. Meanwhile, one-year inflation expectations also moderated to 2.60%, down from 3.41% in Q1. Conversely, longer-term expectations accelerated, with five-year inflation forecasts rising to 2.31% from 2.22%, while ten-year expectations edged up to 2.20% from 2.19%. In terms of monetary policy, respondents expect the Official Cash Rate (OCR) to rise to 2.73% from 2.34% by the end of the September quarter and further to 3.21% over the next year. The survey was conducted after the RBNZ’s monetary policy decision in May 2026.

The Reserve Bank of New Zealand’s (RBNZ) quarterly survey of expectations showed that business managers forecast inflation at 2.53% over the next two years in Q2 2026, up from 2.37% in the previous period, marking the highest reading since Q4 2023. This comes as rising fuel prices are expected to drive broader inflation pressures across the economy. Meanwhile, one-year inflation expectations also climbed to 3.41%, the highest in over two years, up from 2.59% in Q1. In contrast, longer-term expectations eased, with five-year inflation forecasts falling to 2.22% from 2.31%, and ten-year expectations declining to 2.19% from 2.30%. In terms of monetary policy, respondents expect the Official Cash Rate (OCR) to rise to 2.34% from 2.25% by the end of the June quarter, and to increase further to 3.01% over the next year. The update comes ahead of the RBNZ’s monetary policy decision in May 2026.

The Reserve Bank of New Zealand’s (RBNZ) quarterly survey of expectations showed that business managers forecast inflation at 2.37% for the next two years in Q1 2026, the highest reading since Q1 2024 and up from 2.28% in the previous quarter. One-year inflation expectations also rose to 2.59% from 2.39%, marking the highest in seven quarters. Additionally, longer-term projections showed that five-year-ahead inflation expectations increased to 2.31% from 2.22%, and ten year expectations went up to 2.3% from 2.18%. In terms of monetary policy, respondents expect the Official Cash Rate (OCR) to stand at 2.25% by the end of March 2026, unchanged from the previous three-month period. The adjustment follows the RBNZ’s recent decision to cut the OCR by 25 basis points to 2.25% on 26 November 2025.