Hold on to your hats, Kiwi watchers! The quarterly consumer inflation figures from New Zealand are due during the Asian session on Thursday, and the team at TD Securities (TDS) has some spicy predictions. They’re expecting Q1’23 CPI inflation to heat up to 1.7% q/q (that’s up from 1.4% in Q4’22), and they’re predicting an annual forecast of 7.1% y/y. That’s higher than market consensus, but slightly below the Reserve Bank of New Zealand’s (RBNZ) own forecast.

What’s driving this spicy inflation? Housing costs and food are the major culprits, but the annual increase in tobacco excise is also contributing to the heat. And while lower fuel prices should help to cool things down a bit, that relief might be short-lived given recent OPEC production cuts.

All in all, TDS thinks inflation is too hot for the RBNZ’s liking and they’re predicting another 25bps hike at the May meeting. So hold onto your wallets, New Zealanders, things are about to get spicy!

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