Bank views on NZ CPI: Westpac: We.......>

NEW ZEALAND: Bank views on NZ CPI: Westpac: We expect a 0.5% rise in consumer

prices for the March quarter. This would bring annual inflation down from 1.6%

to 1.1%, the lowest since September 2016. There are two factors behind the drop

in annual inflation. The first is the introduction of a years' free tertiary

education, which we estimate will take 0.2% off the CPI. The second is base

effects: a surge in oil prices a year ago. The dip in annual inflation this year

will be similarly short-lived. Setting aside the expected volatility, underlying

inflation remains subdued. The lower New Zealand dollar over the last year will

add to tradables inflation, but domestic inflation pressures have yet to pick

up.