Westpac economist Michael Gordon expects the Consumer Price Index to drop to lows not seen in recent times when the quarterly update is announced this week.
Data for the second quarter is to be released on Tuesday and most economists have pencilled in a rise of 0.5% for the June quarter, and 1.1% for the year.
Mr Gordon says he expects the index to plumb the depths and this week's inflation figures are expected to give a subdued picture.
He says it's expected that annual inflation will slow from 1.6% to 1.2% and that's one of the lowest rates that's been seen in about a decade.
Mr Gordon says one feature of the June quarter numbers was a sizeable hike in electricity prices, which is an annual feature.
"Aside from that it's a pretty soft picture at the moment, and that's something that's going to keep the Reserve Bank pretty comfortable for a while longer I think".
He says housing related inflation is starting to come through although it has been fairly modest so far, but as the housing market, and particularly the reconstruction in Christchurch, picks up there will be more pressure on materials and labour and a range of housing related costs.
Mr Gordon says that's something to watch over the next couple of years, although it's not showing up in great detail right now.
He says a combination of a fairly subdued recovery and a strong kiwi dollar have dampened inflation to date.