The latest NZIER Consensus Forecasts shows forecasters have revised up expectations of growth and employment through to 2019. Despite the more favourable growth outlook, expectations for inflation and wage growth have been lowered.
Forecasters have pushed back by around one year expectations of when headline inflation would get back within its 1-3% inflation target band. That said, the consensus is still for headline inflation to edge close to the 2% midpoint target from the second half of 2017.
That’s promising. Stronger growth and low inflation is good.