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New Zealand CPI rises to 4.1% as fuel costs drive inflation

Petrol prices jumped 20.1% over the quarter and contributed nearly half of the CPI increase, keeping the RBNZ focused on energy-linked inflation risks.

Reported · Written up by our desk · Central Banks

New Zealand’s consumer prices rose 1.5% quarter over quarter in the second quarter, lifting annual inflation to 4.1% from 3.1%, according to data cited by Action Forex.

The acceleration was driven overwhelmingly by energy-related costs. Petrol prices surged 20.1% over the quarter, contributing nearly half of the quarterly CPI increase, while prices for other vehicle fuels and lubricants climbed 47.7%.

Action Forex also pointed to higher housing construction costs as another contributor, with lower fruit prices and declining domestic accommodation costs acting as partial offsets. The report’s breakdown suggested imported inflation remains the dominant driver, with tradeable inflation accelerating to 4.9% while non-tradeable inflation was 3.4%.

For the Reserve Bank of New Zealand, the outlet said the data is unlikely to end the policy debate. Although the headline figure exceeded the RBNZ’s 3.9% projection, Action Forex noted the upside was largely tied to fuel prices, and cautioned that renewed global oil price strength following developments in the Middle East could increase the case for further tightening if energy costs feed more broadly into domestic prices.

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