The latest survey from the Reserve Bank shows the inflation expectations of companies fell in the fourth quarter.
The bank's survey shows business managers expect inflation to average 3.4% over the coming year, down from 3.9% in the previous quarter.
Two-year inflation expectations were slightly higher at 2.6%.
The survey also shows economic growth is forecast at 2.5% in the coming year, up from 2.3% in the previous survey.
But expectation of growth over the coming two years slipped from 2.8% to 2.7%.
