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.
