New Zealand’s annual inflation rate picked up speed in the second quarter, reaching 4.1% — higher than analysts had anticipated — and continuing to exceed the upper limit of the central bank’s target, according to official figures released Tuesday.
Government statistics showed the country’s consumer price index climbed 1.5% during the second quarter compared to the previous three months. Economists surveyed by Reuters had projected a 1.4% quarterly gain and a 4.0% annual increase.
The Reserve Bank of New Zealand aims to keep annual inflation between 1% and 3% over the medium term.
Statistics New Zealand identified petrol as the biggest single factor pushing prices higher, with costs rising 27.5%. Diesel prices jumped even more sharply, surging 71.1% over the period.
Officials noted that if fuel prices had remained unchanged, the consumer price index would have risen only 2.9% in the 12 months ending June 30.
Earlier this month, the Reserve Bank of New Zealand had forecast annual inflation at 3.9% for the quarter, projecting it would ease to 3.3% in the third quarter as the impact of oil price increases tied to the Middle East conflict works its way out of the headline figure.
The central bank moved to raise its cash rate to 2.50%, marking the first such increase in three years, and indicated that additional rate hikes are likely ahead as it works to bring inflation back within its target range while the economy rebuilds.
