FX.co ★ New Zealand Inflation Rate Exceeds Expectations in Q1

In the first quarter of 2025, New Zealand experienced an accelerated annual inflation rate of 2.5%, up from 2.2% in the preceding quarter. This marks the highest inflation rate since June 2024 and surpasses market predictions, which anticipated a 2.3% rate. Rent emerged as the primary driver of this annual increase, with a 3.7% rise, contributing to 14% of the overall figure, despite it being the smallest annual increase since 2021. Additionally, there was a significant rise in local authority rates and payments, which jumped by 12.2% over the year, also contributing 14% to the inflation rate. Construction costs saw a 1.9% increase, accounting for 7% of the total inflation. Meanwhile, falling petrol prices provided some relief, with a 2.8% decrease over the year following a substantial 9.2% drop in the December 2024 quarter. On a quarterly basis, consumer prices increased by 0.9%, up from the 0.5% growth observed in the previous period.