WELLINGTON, Feb 16 (Reuters) - New Zealand's near-term inflation expectations eased in the first quarter, bolstering views the central bank may need to cut interest rates again, a survey showed Tuesday.
The quarterly survey of expectations done on behalf of the Reserve Bank of New Zealand (RBNZ) showed business managers forecast annual inflation to average 1.09 percent over the coming year, from 1.51 percent in the previous survey in December.
Two-year inflation expectations - seen as the timeframe in which RBNZ policy action will filter through to prices - were 1.63 percent, down from 1.85 percent in the prior quarter.
The data weighed on the New Zealand dollar as it added to expectations that the central bank may have to ease interest rates further.
The survey "reinforces the RBNZ is too complacent on weak inflation pressures," said ASB Bank Senior Economist Jane Turner.
She said the central bank will be uncomfortable about the sharp decline in 2-year-ahead inflation expectations.
"We continue to expect further cuts from the RBNZ this year. While we have pencilled in June and August for these cuts, today’s result skews the risks to an earlier start," said Turner.
Last month, the central bank left the official cash rate on hold at 2.5 percent but there have been growing calls for rate cuts, possibly as early as next month, given weak inflationary pressures.
