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Source: New Zealand Treasury:

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  • Activity picked up in late 2021 as restrictions eased, but waning business confidence, a slowing housing market and the threat of Omicron point to further volatility ahead.
  • Cost, price and inflation pressures continue to build. December quarter CPI inflation data, due 27 January, looks likely to exceed our HYEFU forecast of 5.5%. We will update our view and market expectations early next week.
  • Internationally, Q4 growth momentum has subsided as COVID-19 cases have surged, but with seemingly lesser impacts on activity than earlier outbreaks. Tightening labour markets and rising inflation in the major advanced economies is driving global interest rates higher.

MIL OSI