Increase in inflation expectations for the Reserve Bank of New Zealand.

Data released by the Reserve Bank of New Zealand early on Monday morning showed an increase in inflation expectations in New Zealand for the fourth quarter of this year. The survey conducted by the Reserve Bank indicated that consumers expect the inflation rate in the country to be around 2.12% over the next two years, while the previous reading anticipated it to be about 2.03%.

On the other hand, the Reserve Bank's survey reported that one-year inflation expectations have significantly decreased to 2.05%, while the previous reading from the last quarter of the year recorded 2.40%.

It is worth noting that this indicator reflects the expected annual percentage change in the prices of goods and services anticipated by business managers over the next two years, and this indicator typically has a significant impact on the New Zealand dollar.

The Reserve Bank of New Zealand releases these expectations through a periodic survey conducted with 100 consumers, who are questioned about their expectations for the anticipated inflation levels over the next two years.

Investors pay attention to this indicator because workers often seek higher wages if their inflation expectations rise, which typically leads to increased demand and consequently higher inflation.