New Zealand Inflation Rises To 2.5%

(RTTNews) - New Zealand inflation accelerated for the first time in nearly three years in the first quarter but it remained well within the central bank target, official data showed on Thursday.

Consumer price inflation rose to 2.5 percent in the first quarter from 2.2 percent in the preceding period, Sats NZ reported.

Inflation accelerated for the first time since mid-2022. Inflation was seen at 2.3 percent in the first quarter.

"The annual inflation rate is within the Reserve Bank of New Zealand's target band of 1 to 3 percent for the third consecutive quarter," prices and deflators spokesperson Nicola Growden said.

The largest contributor to the annual inflation was rent, which rose 3.7 percent. Meanwhile, lower petrol prices slightly offset the annual inflation, which fell 2.8 percent.

Annual non-tradable inflation, a closely watched indicator, softened to 4 percent from 4.5 percent. At the same time, tradables prices gained 0.3 percent, in contrast to the 1.1 percent fall in the prior quarter.

On a quarterly basis, consumer prices rose 0.9 percent, faster than the 0.5 percent rise in the fourth quarter of 2024.

With underlying price pressures set to ease further, the Bank is likely to cut rates further than most expect, Capital Economics economist Abhijit Surya said.

At the April meeting, RBNZ reduced its benchmark rate by a quarter-point and hinted at further easing as recent increases in trade tariffs pose downside risks to economic outlook.