First quarter 2017 inflation data from NZ
1% q/q BEAT
- expected 0.8% q/q, prior 0.4%
2.2% y/y BEAT
- expected 2.0% y/y, prior 1.3%
- That's a 5-year high (since the September 2011 quarter)
- Tradable prices increased 1.6%, while prices for non-tradables increased 2.5%
- ps. The Reserve Bank of New Zealand forecast is 1.5% (not expecting 2% until 2019 ... though the Bank did flag it had upside risk
- pps. RBNZ target band is 1 to 3% for inflation, so at 2.2% it's the first time popped above the mid point in 5 years
Says Stats NZ: "Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation ... Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year"
- Housing-related prices continued to increase
- Transport prices (up 3.5 percent) made the second largest upward contribution
- Prices fell for broadband and cellphone plans, as well as handsets. Improvements to speed and data capacity improved the quality of the service, which is reflected as a price fall
- Excluding petrol, and cigarettes and tobacco, the CPI showed a 1.5 percent increase (y/y)
NZD has popped on the release:
More ...
Underlying price change shows lower overall increase
- The trimmed mean measures - which exclude extreme price rises and falls - showed quarterly changes below the 1.0 percent increase in the March 2017 quarter across all trims
- This indicates the 'underlying' price change (excluding extreme price rises and falls) was lower overall for the quarter, with the cigarettes and tobacco class being the main upwards contributor.
- Underlying price change was similar on an annual basis.
