FX.co ★ New Zealand 2-Year Inflation Outlook Steady at 2.28%

The Reserve Bank of New Zealand's (RBNZ) latest quarterly survey reveals that business managers maintain their forecast for inflation to be 2.28% over the next two years through to the fourth quarter of 2025, consistent with the previous quarter's projections. Short-term expectations indicate a slight increase in one-year inflation projections, rising marginally to 2.39% from 2.37%, which continues to suggest that price pressures may remain controlled in the foreseeable future. Perspectives on inflation for a more extended period show mixed sentiments: five-year-ahead expectations have eased slightly to 2.22% from 2.26%, while ten-year expectations saw a minor uptick to 2.18% from 2.15%. Regarding monetary policy, the expectation among survey respondents is that the Official Cash Rate (OCR) will be 2.25% by December 2025, a significant decrease from the previous forecast of 3.02%, before experiencing a modest rise to 2.31% by September 2026. This adjustment comes in the wake of the RBNZ's recent decision, on October 8, 2025, to reduce the OCR by 50 basis points, bringing it to 2.50%.