Survey respondents reported:

• Inflation expectations for one year ahead have decreased since last quarter from 2.09% to 1.82%. Expectations for two years ahead remain steady.

• GDP is expected to grow at 2.38% and 2.36% for one and two years ahead respectively.

• The expected one year ahead unemployment rate decreased from 4.40% to 4.17%. This follows a decrease in the official unemployment rate from 4.4% to 3.9% (revised to 4.0%) for Q3 2018 as reported by Statistics New Zealand in November 2018.

• House price inflation expectations decreased from 2.86% to 1.91% for one year ahead, and from 2.31% to 2.14% for two years ahead.

• A net 68.3% of respondents believe current monetary conditions are easier than neutral. This is up from a net 63.8% in the previous quarter’s survey. A net 75.6% of respondents believe monetary conditions in one year’s time will be easier than neutral.

• The NZ/US dollar exchange rate is expected to be 0.67 at the end of June 2019, and 0.66 at the end of December 2019. It was at 0.677 when the survey was conducted (23 January 2019).