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1. New Zealand’s Q2 CPI inflation was +0.54% q/q and +2.7% y/y.
This was below our expectation for +0.7% q/q and +2.8% y/y but closer to the RBNZ’s May MPS forecast of +0.5% q/q and +2.6% y/y.
As flagged previously by StatsNZ, an upwards ‘catch up’ correction to vehicle licensing fees which was erroneously not captured in the Q1 CPI added 0.1ppts to quarterly headline inflation (in rounded terms) in Q2.
While available data don’t allow a closer inspection, we suspect this correction added less than 0.1ppts to quarterly inflation before rounding.
Why? Other private transport services rose +3.6% q/q in Q2 and contributed +0.05ppts to headline inflation. We had assumed a contribution of roughly double that in our nowcast, hence that contributed meaningfully to our ‘miss’.
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