FX.co ★ New Zealand Q1 Inflation Outlook Highest in 2 Years

The Reserve Bank of New Zealand’s (RBNZ) quarterly survey of expectations showed that business managers now forecast inflation at 2.37% over the next two years as of Q1 2026. This is the highest level since Q1 2024 and up from 2.28% in the previous quarter. One-year inflation expectations also rose, climbing to 2.59% from 2.39%, the highest reading in seven quarters. Longer-term projections moved higher as well: five-year-ahead inflation expectations increased to 2.31% from 2.22%, while ten-year expectations rose to 2.30% from 2.18%.

On the monetary policy front, respondents expect the Official Cash Rate (OCR) to be at 2.25% by the end of March 2026, unchanged from the prior survey. This follows the RBNZ’s recent decision to cut the OCR by 25 basis points to 2.25% on 26 November 2025.