New Zealand consumer prices increased by 1.5% in the June quarter, resulting in an annual inflation rate of 4.1%, up from 3.1% in the year to March and the highest level in two years, Westpac said in a report on Tuesday.
The result was in line with Westpac's forecast, but slightly above the Reserve Bank's July forecast for 3.9% annual inflation.
Much of the rise in inflation is attributed to increasing global oil prices since the start of the Middle East conflict, and while core inflation is softening, it remains above the Reserve Bank's 2% target midpoint, according to Satish Ranchhod, Westpac NZ senior economist.
Oil prices have pulled back from their initial peak, but ongoing geopolitical tensions could keep them elevated for some time, with headline inflation anticipated to linger above 3% through the latter part of the year.
While core inflation softening alleviates some concerns for the Reserve Bank, inflation remains high, leading to expectations of further rate hikes in September and December policy meetings, per the report.
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