Our ANZ Chart Pack has been updated with the latest data and our analysis of recent developments.
The continued acceleration in Australia’s underlying inflation at the start of the year vindicates the RBA’s decision to tighten policy at its February meeting. With the economy and labour market operating above sustainable levels, we expect the Bank to raise rates to 4.35% in order to bring inflation back to target over the medium-term. Our view is more hawkish than the analyst consensus. In contrast, New Zealand’s output gap is deeply negative, the recovery is not yet fully fledged, and price pressures remain relatively benign. Accordingly, we think the RBNZ will not begin normalising policy before Q2 2027, which is later than most analysts expect.
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