Photo: RNZ
Consumer confidence remains subdued despite an improvement in April, but household inflation expectations have soared amid the US-led tariff war.
The ANZ-Roy Morgan Consumer Confidence index rose 5 points in April to 98.3, meaning pessimists continued to outweigh optimists.
A reading above 100 indicated optimism.
Inflation expectations jumped 0.5 percentage points to 4.7 percent, the highest reading since July 2023.
"It may be related to global tariff talk, but since New Zealand is not putting on new tariffs, global developments are unlikely to be inflationary here," ANZ chief economist Sharon Zollner said.
She said household inflation expectations mattered less for the inflation outlook than business inflation expectations.
"But all else equal, when households are expecting high inflation, that can boost wage demands and make it easier than otherwise for firms to raise their prices," Zollner said.
More people continued to feel it was a bad time to buy a major household item, but sentiment improved.
"It's still a long way from suggesting good times for the retail sector," Zollner said.
A net 23 percent of households expected to be better off this time next year - an improvement of 7 points, and perceptions of current personal situations improved.
"It's good to see that New Zealand consumers so far appear to be relatively unfazed by the recent bout of global volatility," Zollner said. "In the bigger picture, though, consumer confidence remains subdued, and this is dampening the outlook for the retail sector."
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