People buy fruits at a fruit and vegetable market in front of the Te Papa Museum in Wellington
© Jacky Naegelen / Reuters
People buy fruits at a fruit and vegetable market in front of the Te Papa Museum in Wellington October 2, 2011. REUTERS/Jacky Naegelen
updated 3/20/2014 8:14:52 PM ET 2014-03-21T00:14:52

WELLINGTON (Reuters) - New Zealand consumer confidence was marginally softer in March but consumers remained strongly positive buoyed by the cheery economic outlook despite the prospect of higher interest rates, a survey showed on Friday.

The ANZ-Roy Morgan consumer confidence index dipped to 132~ from 133 in February. The index touched a seven year high in January.

A reading above 100 shows optimism, while below indicates pessimism.

ANZ said sentiment was holding firm in the face of likely rate rises with stronger house prices, a better labor market, and reasonable income growth boosting consumers.

Major Market Indices

The survey showed consumers were a touch more optimistic about their own financial position, a little less positive about the 12 month economic outlook, but slightly more positive about the longer-term outlook.

The number of respondents who believed it was a good time to buy a major household item eased to 44 percent from 47 percent the previous month.

Expectations of consumer price inflation eased, with prices seen rising 3.4 percent over the next two years from 3.5 percent in the previous survey.

The Reserve Bank of New Zealand started its long-awaited rate tightening cycle last week, raising interest rates by 25 basis points to 2.75 percent, as expected, to counter rising inflation pressures.

The bank said it expects to be gradually raising rates over the next two years, with its forecasts pointing to a cash rate rising towards 5 percent by the end of 2016.

(Gyles Beckford; Editing by Shri Navaratnam)

(c) Copyright Thomson Reuters 2014. Check for restrictions at: http://about.reuters.com/fulllegal.asp

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