25 Nov 2014

Inflation expectations fall

4:09 pm on 25 November 2014

Expectations of where inflation will be in the next couple of years have fallen.

The latest Reserve Bank quarterly poll shows that businesses expect inflation would be 2.06 percent in two years' time, compared with 2.23 percent in the previous period.

The central bank paid particular attention to the two-year figures as a gauge of inflation pressures.

One-year expectations declined from 1.96 percent to 1.59 percent.

Other parts of the survey showed respondents also reduced their expectations of gross domestic product growth and earnings growth over the next couple of years.

GDP expectations dropped from 3.1 percent to 2.27 percent in a year's time, while two-year expectations fell from 2.7 percent to 2.5 percent.

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