Data Flash (New Zealand)
Preview NZ: Consumer Price Index Preview - Q3 2001
(Release: 15 October, 10.45 NZT) 9 October 2001
Deutsche Bank forecast: +0.6% qoq / + 2.4% yoy - balanced risk distribution RBNZ projection in August MPS : +0.6% qoq /
+2.4% yoy Previous release (Q1): +0.9% qoq / + 3.2% yoy
Key Points
We expect the CPI to have increased by 0.6% qoq in Q3, leading to a fall of the annual rate of inflation from 3.2% to
2.4%.
The main contributor to the quarterly result is expected to be the food group, with domestic food prices rising on the
back of high world prices for agricultural commodities, as well as the low NZD. The annual excise tax increase for
alcoholic drinks will make another sizeable contribution, while the rise in the housing group will reflect increased
construction costs and local authority rates.
A key negative contribution will be recorded for the transport group, due to a 4% decline in petrol prices.
Our forecast implies a further rise in the various core inflation measures. For example, excluding Fresh
Fruit/Vegetables, Petrol, Tobacco Taxes and State House Rentals from the headline CPI, the annual rate of core inflation
is expected to rise from 3.0% to 3.2%. Similarly, the median of annual price changes is expected to rise from 2.5% to
3.3%.
Looking ahead to Q4, our preliminary forecast is for a 0.7% qoq increase of the CPI. If our Q3 forecast proves to be
correct, that would reduce the annual rate of official CPI inflation to 1.9%. However, the annual measures of core
inflation would still record around 2.8%.
Ulf Schoefisch, Chief Economist, New Zealand
This, along with an extensive range of other publications, is available on our web site http://research.gm.db.com
Please do not respond to this mailbox. If you need to update your contact information or request new research, contact
your Deutsche Bank Sales Contact.