Based on the Reserve Bank of New Zealand's (RBNZ) latest survey, New Zealand's two-year inflation expectations are set to record their first decline since mid-2020.
Inflation expectations are measured by the percentage of business managers who expect the prices of goods and services to change annually over the next two years.
Two years is seen as a period of time when central bank monetary policy actions are explained through prices.
According to the quarterly survey of business expectations released by the RBNZ, business managers expect inflation to decline to 3.07% in the third quarter from 3.29% in the previous quarter.
The central bank is expected to deliver its fourth straight half-point hike at its policy meeting next week, taking the official interest rate to 3%.
The kiwi dollar traded lower in the wake of the data release as investors saw the subdued inflation expectations could prompt policymakers to deliver slower rate hikes in the coming quarters.
