New Zealand's annual migration rose to its highest in more than a decade last month, keeping the net inflow at a pace both the Reserve Bank and the Treasury say will drive up demand in the domestic economy this year.
The country gained a net 36,400 migrants in the year through May, the highest since the November 2003 year, Statistics New Zealand said. The Treasury expects net migration to peak at 38,100 in the year through September before returning to the long-run assumption of 12,000 a year by 2017. (See graph below)
The Reserve Bank this month raised interest rates for a third time and said further hikes were on the way, as it tries to stem the inflationary pressures of a growing economy where migration is helping fuel domestic demand. The latest migration figures are probably stronger than the Reserve Bank expected as it had forecast annual migration of those aged 15+ to reach 33,000 in the June quarter, with the measure already above 34,000 in May, Westpac Banking Corp. said.
"Along with recent strong consumer confidence and GDP data, that's another tick in the box for a follow-up hike in July," Westpac senior economist Felix Delbruck said in a note. "The implications for the interest rate outlook further out probably goes more in the direction of supporting the RBNZ's fairly hawkish stance in the June MPS, rather than pushing it up further."
New Zealand gained a seasonally adjusted 3,980 migrants in May, a touch softer than the 4,100 pace in April, Statistics New Zealand said. A net 200 people left for Australia in April, matching the previous month's record low.
The number of short-term visitor arrivals rose 5.4 percent to a record 161,400 for a May month, helped by more visitors from the US and Japan, the agency said. Overseas trips by New Zealanders rose 9 percent to 198,200 in May from the year earlier month.
The New Zealand dollar was little changed at 87.02 US cents, from 86.99 cents immediately before the 10:45am release.