Annual inflation hits 4.1% in June quarter - reaching a two-year high
New Zealand's annual inflation rate rose to 4.1% in the June quarter, exceeding the central bank's target range and previous projections. The increase was primarily driven by higher petrol prices due to global supply disruptions.
Why it matters
Persistent inflation above the target range puts pressure on the Reserve Bank of New Zealand to maintain or increase interest rates, impacting the cost of living and borrowing.
Annual inflation, as measured by Statistics New Zealand’s Consumers Price Index (CPI) increased to 4.1% in the June quarter – the highest annual inflation rate NZ has seen since it hit 4.7% in December 2023.
Higher petrol prices was the main contributor to the increase, no surprise as conflict in the Middle East has impacted fuel supply and triggered major supply disruption in the global oil market.
Electricity, local authority rates and payments, construction of new housing and other vehicle fuels and lubricants (like diesel) also drove the annual CPI increase.
The latest inflation figure comes after the March quarter remained at 3.1% , for the second consecutive quarter. Annual inflation continues to breach the Reserve Bank’s (RBNZ) target range of 1% to 3%.
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