Economics
New Zealand on Deflation Brink as Prices Fall More Than Forecast
- Prices fell 0.5% in fourth quarter, the most since 2008
- Currency slumps more than half a U.S. cent after data
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New Zealand is on the brink of deflation after prices fell more than economists forecast in the fourth quarter, heaping pressure on the central bank to cut interest rates to a fresh record low.
Consumer prices fell 0.5 percent from the third quarter, Statistics New Zealand said Wednesday, the third decline in five quarters and more than the 0.2 percent drop economists expected. That pushed the inflation rate down to 0.1 percent, the weakest since 1999 when New Zealand last experienced deflation, or annual price declines.