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Inflation pressures are easing despite resilience in the New Zealand economy - Quarterly Predictions, March 2024
There are signs of further easing in inflation pressures in the New Zealand economy. This reflects the intended dampening effects higher interest rates are having on demand, as well as an easing in capacity pressures. In particular, there has been a remarkable turnaround in labour shortages over the past year. Net migration has recovered strongly with the reopening of international borders, as firms bring in workers from overseas. We explore further the dynamics of immigration on our labour supply and the broader New Zealand economy in our Special Feature this quarter. Some risk of inflation remaining stubbornly high ... (full story)