Report published May 11, 2026
Markets Outlook: BNZ Economic Analysis (May 2026)
Bank of New Zealand · May 11, 2026
The BNZ Markets Outlook highlights an impending spike in Q2 CPI driven by a Middle East-related energy shock, alongside evidence of a weakening NZ service sector. Markets are watching the upcoming RBNZ survey of expectations and the Australian federal budget for further policy direction.
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Finvaulta summarizes Bank of New Zealand's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.The Middle East conflict has triggered a substantial energy cost shock, with diesel and petrol prices expected to surge by 42% and 16% respectively in April.
- 2.New Zealand growth is slowing sharply, with the Performance of Services Index (PSI) falling to a weak 46.0 in March, indicating the sector is under strain.
- 3.The RBNZ is focused on medium-term inflation expectations; while headline CPI is spiking, wage outcomes remain non-threatening for now.
Table of Contents
- Monitoring the cost
- Global Watch
- Key Event Previews
- Fixed Interest Market
- Foreign Exchange Market
- Technicals
- Quarterly Forecasts
- Annual Forecasts
- Key Upcoming Events
Report data
Under pressure
| Metric | Estimate | Context |
|---|---|---|
| BusinessNZ Manufacturing PMI | 53.2 Index | Indicated decent manufacturing activity through the first quarter. |
| Performance of Services Index (PSI) | 46.0 Index | Revealed a service sector under increasing strain. |
| Diesel Price Forecast | 42 % m/m | Sharp increase due to energy cost shock. |
| RBA Cash Rate | 4.35% | Raised by 25bps for the third consecutive meeting. |
Reports in this series
Markets Outlook is shown in chronological order through this edition, published on May 11, 2026.
Part of the Markets Outlook series — view all 7 editions
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