Westpac Nudges Q1 Inflation Forecast Higher

The local bank has raised its Q1 inflation forecast, and stating it sees upside risks to the RBNZ's inflation profile, see below for more details:

Westpac: "We have revised up our forecast for New Zealand March quarter inflation slightly.

• We now expect that New Zealand consumer prices will rise by 0.8% in the March quarter (previously we forecast a rise of 0.7%). That would see the annual inflation rate dropping to 4.2%, down from 4.7% at the end of 2023.
• Inflation is likely to be stronger than the RBNZ assumed at the time of their February Monetary Policy Statement. While inflation pressures are easing, that decline is occurring gradually. Notably, we’re still seeing strong price increases in parts of the domestic economy.
• February saw food price inflation surprising to the downside. However, that was more than offset by strength in areas related to travel, like the cost of airfares and overseas accommodation (with price rises in accommodation coinciding with the recent Taylor Swift concerts)."