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New Zealand Inflation Unexpectedly Slowed in Third Quarter

Published 22/10/2020, 23:00
Updated 22/10/2020, 23:18
© Bloomberg. Pedestrians walk along the waterfront at Lake Wakatipu in Queenstown, New Zealand, on Thursday, Sept. 10, 2020. In a normal year, international tourism is New Zealand’s biggest export — and with its majestic alpine scenery, adventure sports and vineyards, Queenstown is usually booming. But with the country’s border closed since March 19, there are fewer foreign accents to be heard in the resort town. Photographer: Mark Coote/Bloomberg

(Bloomberg) -- New Zealand inflation unexpectedly slowed in the third quarter as fuel prices failed to recover.

Consumer prices rose 1.4% from a year earlier, Statistics New Zealand said Friday in Wellington. That compared with 1.5% in the second quarter, and was less than the 1.7% expected by economists. Prices rose 0.7% from three months earlier, less that the 0.9% forecast.

Inflation is set to weaken markedly next year as a sluggish economic recovery and rising unemployment exert downward pressure on wages and consumer spending. The Reserve Bank in August projected inflation would slow to just 0.3% by the end of 2021, and has signaled it is prepared to provide more stimulus through negative interest rates if needed. It targets inflation of 1-3%.

The New Zealand dollar fell after the report, buying 66.69 U.S. cents at 10:57 a.m. in Wellington.

©2020 Bloomberg L.P.

© Bloomberg. Pedestrians walk along the waterfront at Lake Wakatipu in Queenstown, New Zealand, on Thursday, Sept. 10, 2020. In a normal year, international tourism is New Zealand’s biggest export — and with its majestic alpine scenery, adventure sports and vineyards, Queenstown is usually booming. But with the country’s border closed since March 19, there are fewer foreign accents to be heard in the resort town. Photographer: Mark Coote/Bloomberg

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