Inflation expectations remained steady in the September quarter from the June quarter, with prices expected to rise 2.3% over the next two years, a survey carried out for the Reserve Bank showed. The Reserve Bank Survey of Expectations of 79 business managers from around the country, carried out by Nielsen, showed that the average expectation for inflation (CPI) over the next year remained at 1.8% in the September quarter from June. The average two year expectation of 2.3% was up slightly from 2.2% last quarter. The CPI is expected to increase by 0.4% over the September quarter and then by 0.5% in the December quarter. The survey also found that the unemployment rate was expected to rise to 7.2% in June 2010, and be at 6.7% in June 2011.
Hourly earnings growth over the next year is expected to be 1.7%, down from 2% in the June quarter. Earnings growth over the next two years is expected to be 2.3%, from 2.5% in June. Meanwhile, New Zealand's GDP is expected to grow by 0.8% over the next year, from an expected yearly contraction of 0.2% in June. GDP growth over two years is expected to be 2%, compared to the expectation of 1.7% in June. GDP is expected to show a 0.2% fall in the June quarter and be unchanged in the September quarter.
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