New Zealand's annual migration extended its decade highs in July, with the inflow continuing to surpass Treasury and Reserve Bank expectations.
The country gained a net 41,000 migrants in the year through July, the highest since August 2003, Statistics New Zealand said. Annual arrivals rose to 102,400, the highest ever inflow, while departures were down 22 percent from the year before to 61,400, as fewer New Zealanders left for Australia.
The Treasury had forecast annual net migration to peak at 38,100 in September, before returning to the long-run assumption of 12,000 a year by 2017, while the central bank expected a mid-2014 peak at 37,000, according to its June Monetary Policy Statement. High levels of migration are stoking demand for housing and boosting spending in the economy, and Reserve Bank governor Graeme Wheeler has flagged stronger than expected inflows as a significant inflationary pressure.
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Wheeler embarked on a front-loaded tightening cycle in March this year, raising the official cash rate four times to 3.5 percent from a historically low level in place to stimulate spending during the global financial crisis and the Canterbury earthquake. The governor is now widely expected to pause in his hikes until next year to asses the impact of hikes and as falling commodity prices, particularly in dairy and logs, appear to take some steam out of New Zealand's economic momentum.
