We have nudged up our economic forecasts for 2014 and bolstered them for 2015. While some of this is population driven, the overall consequence is greater excess demand than we previously envisaged. This, in turn, will drive CPI inflation above the Reserve Bank’s 1.0 to 3.0% target band. To bring inflation under control, the Bank will be forced to lift its Official Cash Rate (OCR) through neutral, to a braking level of 5.00%. This process will likely be reinforced by the NZ dollar struggling to hold its already very high level
Read the full report: Economic Research
BNZ