The RBNZ breathed a sigh of relief last month with news unemployment rose, and the Consumer Price Index (CPI) quarterly inflation reading eased slightly. While it was pleasing to see tangible evidence that restrictive monetary policy measures are having their desired effect, the economy continues to grapple with persistent challenges.
Most notably, domestic (or non-tradeable) inflation is a sticking point, with the cost of homegrown goods, services and housing remarkably resilient in the face of economic decline.