By Phil Boeyen, ShareChat Business News Editor
Wednesday 9th January 2002 |
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The bank says it expects the CPI to have increased by 0.5% in the 3 months ended December compared to the previous quarter, leading to a fall of the annual rate of inflation from 2.4% to 1.7%.
"Our forecast is in line with the market consensus but marginally weaker than the RBNZ's November monetary policy statement," the bank says.
"The decline in petrol prices since the RBNZ finalised its forecast is likely to explain its higher forecast."
Deutsche Bank says the main contributor to the rise is expected to be food prices, with domestic prices rising on the back of high world prices for agricultural commodities. Lower fruit and vegetable prices provide a partial offset.
"Further positive contributions are expected from the housing group, reflecting increased construction costs and local authority rates.
"A key negative contribution is expected to stem from the transport group. An estimated 10.5% decline in petrol prices will subtract 0.4pps from the CPI outcome. However, around half of this impact is expected to have been offset by higher prices for domestic and international airfares."
Looking further ahead the bank believes the CPI will show another 0.5% quarter-on-quarter increase for the three months to the end of March, taking the annual rate back up to 2.4%.
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