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New Zealand Consumer Confidence Bounces in May, Says ANZ Research

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Consumer confidence in New Zealand rose 6 points in May to 86.5, tracking a small uplift, although the index remained 21 points lower than its January peak with Wellington remaining the most downcast region, ANZ Research said Friday.

According to the ANZ-Roy Morgan Consumer Confidence Index, inflation expectations fell to 5.3% this month, compared with 6.6% in April, while house price expectations declined 0.7 percentage points to 2.6%.

The firm's best retail indicator, which is the net proportion of households thinking it's a good time to buy a major household item, jumped 5 points to negative 20.

It said the bounce in consumer confidence is possibly linked to the modest drop in petroleum prices in May, but confidence remains broadly in line with levels seen before the Middle East conflict, as higher petrol prices continue to weigh weekly budgets with ongoing concerns about the broader economic outlook.

"The outlook for global oil prices remains very clouded, leading to uncertainty around inflation, interest rates and the labor market," analysts at ANZ commented.

The firm expects the central bank to return the Official Cash Rate to neutral at around 3% in July.

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