Jarrod Kerr: Kiwibank chief economist on whether inflation is set to go down following recent stats

There's belief from some economists that inflation's peaked, and it's all downhill from here. 

It reached 3 percent in the year to September - up from 2.2 percent the year before.

Kiwibank says the third quarter is traditionally tough, and conditions are likely to improve as the year ends. 

Kiwibank chief economist Jarrod Kerr says he's satisfied domestic prices will now ease. 

"We think inflation, this time next year, will be running at about 1.7, 1.8 percent. So job done for the Reserve Bank."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio Afternoon.

Speaker 2 (00:17):
Inflation has come in today at three percent, which puts
inflation at the very top of the Reserve Bank's target range.
It was driven by council rates up nearly nine percent
and power prices up more than eleven percent. Jared Kerr
is Kiwibank's chief economist and with us Hi, Jared Hi,
are you worried about this or deerkin inflation falls away
from here?

Speaker 3 (00:35):
No, we think this is the peak. It's a pretty
tough quarter the third quarter, but things tend to ease
off in the fourth quarter. So we had a bit
of a spike in food, electricity, council rates, you know
that sort of unwinds from here and scratching beneath the surface.
We're quite satisfied that domestic prices are heading in the

(00:58):
right direction. Not much we can do with the international prices.

Speaker 2 (01:01):
Where do you see it going? I mean I read
somewhere that it might it might even vote fall below
two percent next year. Do you think that?

Speaker 3 (01:07):
Yeah, that's our walkass. We think inflation this time next
year we'll be running at about one point seven one
point eight, So job done for the Reserve Bank. The
Reserve Bank really has employed a scorched earth policy here
with domestic prices coming off quite quickly and likely to

(01:28):
fall over next year.

Speaker 2 (01:30):
So what are you going for another cut in November
twenty five basis points.

Speaker 3 (01:34):
Yeah, I think that's done and dust it. I think
we can almost talk about that in the past tense.
It's what they do from there. If the economy does
not show signs of recovering over summer, then I think
the new arvins and government will be more than willing
to drop it to two percent. But we're getting close
to that bottom, which is the key message for business owners,

(01:57):
and we are looking to next year with some optimism.

Speaker 2 (02:00):
Jared, it's good to talk to you. Thank you mate.
That's Jared Kirky, we Bank's chief economist.

Speaker 1 (02:04):
For more from News Talks B listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio.