Reserve Bank Chief Economist Paul Conway has expressed concern over New Zealand’s inflation expectations, which remain above the central bank’s target. Speaking at an event in Sydney on Tuesday, Conway noted that both 5- and 10-year inflation expectations are hovering around levels last seen when headline inflation exceeded 7% post-Covid.
Conway described these expectations as a key factor for policymakers as they prepare for the December interest-rate decision. The current readings, he said, are particularly worrying given that they sit above the 2% target midpoint set by the Reserve Bank.
The remarks come amid growing scrutiny of inflation trends in New Zealand, where economic recovery and monetary policy adjustments remain in focus. Conway emphasized that he will be closely monitoring these expectations in the lead-up to the next policy meeting.