The annual pace of inflation eased to 6.7% in the March quarter versus 7.2% in the December quarter.
“Inflation is still at levels not seen since the 1990s,” Stats New Zealand’s consumer prices senior manager, Nicola Growden, said.
While it’s lower than the 7.3% forecast by the Reserve Bank of NZ, it may not be enough to deter the central bank from lifting interest rates again in May, by another 25 basis points, to 5.50%.
The central bank is mandated with keeping inflation between 1% and 3%, with a focus on the midpoint.
Quarterly inflation rose 1.2% in the March 2023 quarter, influenced by rising prices in the food, alcoholic beverages and tobacco, and housing and household utilities groups.
Annual non-tradeable inflation, which measures goods and services that do not face competition from foreign goods, lifted 6.8% in the 12 months to March 2023 – the highest since the series began in June 1999.
The non-tradeable inflation shows how domestic demand and supply conditions are affecting consumer prices. It is the inflation most keenly watched by the central bank.
Tradeable inflation was 6.4% in the 12 months to March 2023, driven by higher prices for international air transport.
Regarding NZ’s peers, annual inflation is now lower than the 6.8% in Australia reported in February, but higher than the 4.3% reported in Canada in March.
The trimmed-mean measures, which exclude extreme price movements, ranged from 5.9% to 6.1%, indicating underlying inflation is lower than the 6.7% increase in the consumers price index.