New Zealand's Annual Inflation Rises More Than Expected in March Quarter

New Zealand's annual consumer inflation accelerated to 2.5% in the March quarter from 2.2% in the prior three-month period, data from StatsNZ showed Thursday.

The Trading Economics consensus forecast was for a 2.3% print.

The Reserve Bank of New Zealand has set an inflation target of 1% to 3%.

A 3.7% increase in rent was the largest contributor to the annual inflation rate, per Stats NZ.

"This is the first time annual rent has increased by less than 4 percent since 2021," said prices and deflators spokesperson Nicola Growden.

Notably, less than a quarter of the consumer price index (CPI) basket increased by 5% or more in the 12 months to the March quarter.

"We are seeing the lowest proportion of the CPI basket increase in price by more than 5 percent over the last four years," Growden said, while noting that the rate remains above pre-COVID levels.

Meanwhile, cigarettes and tobacco prices rose 3.9% as the excise duty on this category kicked in on Jan. 1.

On a quarter-on-quarter basis, inflation rose to 0.9% from 0.5%.