FX.co ★ New Zealand Q2 Inflation Expectations Highest in A Year

The Reserve Bank of New Zealand's (RBNZ) latest quarterly survey indicates an upward revision in business managers' inflation expectations. As of the second quarter of 2025, inflation is anticipated to average 2.29% over the next two years, a rise from the previous quarter's 2.06%—marking the highest level in a year. Additionally, expectations for inflation over the next year have increased to 2.41% from 2.15%, their highest in four quarters. Longer-term predictions reveal a slight increase in five-year forward inflation expectations, up to 2.18% from 2.13%, and a rise in the ten-year forecast to 2.15% from 2.07%. Regarding interest rates, participants project the Official Cash Rate (OCR) to reach 3.77% by the end of the first quarter in 2025, with a decrease to 3.23% anticipated by the end of the year.