The Monetary Policy Committee expects New Zealand's headline inflation to return to within the 1 to 3 percent target range in the second half of this year, Xinhua news agency reported.
“Restrictive monetary policy has significantly reduced consumer price inflation,” the committee said in a statement.
The Committee agreed that monetary policy would need to remain accommodative, the extent of which would be reduced over time in line with the expected decline in inflation pressures.
It states that the OCR affects the price of borrowing and the level of economic activity and inflation in New Zealand.
The statement said the decline in inflation reflected a reduction in domestic pricing pressures, as well as lower inflation for imported goods and services into New Zealand.
Labor market pressures have eased, reflecting cautious hiring decisions by companies and an increased supply of labor. It said the level of economic activity, including business and consumer investment spending and investment intentions, is consistent with a restrictive monetary stance.
Current and expected government spending will control overall spending in the economy. However, the positive impact of the pending tax cuts on private spending is less certain.
“Restrictive monetary policy has significantly reduced consumer price inflation,” the committee said in a statement.
The Committee agreed that monetary policy would need to remain accommodative, the extent of which would be reduced over time in line with the expected decline in inflation pressures.
It states that the OCR affects the price of borrowing and the level of economic activity and inflation in New Zealand.
The statement said the decline in inflation reflected a reduction in domestic pricing pressures, as well as lower inflation for imported goods and services into New Zealand.
Labor market pressures have eased, reflecting cautious hiring decisions by companies and an increased supply of labor. It said the level of economic activity, including business and consumer investment spending and investment intentions, is consistent with a restrictive monetary stance.
Current and expected government spending will control overall spending in the economy. However, the positive impact of the pending tax cuts on private spending is less certain.
