Monthly Business Survey: January 2024

This quarter, the Survey of Expectations went into the field on 25th January 2024, following the Stats NZ’s Consumers Price Index (CPI) release on 24th January 2024. Annual CPI inflation for the December 2023 quarter was measured at 4.7%, a decline from last quarter’s 5.6% annual inflation. Respondents’ expectations for CPI inflation have declined across short, medium, and long terms. The two-year-ahead, five-yearahead and ten-year-ahead annual inflation expectations decreased from last quarter’s mean estimates and remained within the 1- 3% inflation target band (see Figure 1). Short-term and medium-term CPI inflation expectations The mean one-year-ahead annual inflation expectation decreased from 3.60% to 3.22%, a decline of 38 basis points compared to the last quarter. More than half of survey respondents now expect CPI inflation to fall within the 1 to 3 percent target band by the end of 2024. The mean two-year-ahead annual inflation expectation fell by 26 basis points to 2.50% from post: New Zealand 2Yr Inflation Expectation Q1: 2.50% (prev 2.76%) - 1Yr Inflation Expectation: 3.22% (prev 3.60%) - Monetary Conditions Current: 97.37% (prev 91.89%) - Monetary Conditions Next Quarter: 84.21% (prev 72.97%) - Monetary Conditions 1Yr: 62.16% (prev 37.84%)