New Zealand: Inflation ticks up in Q1
Latest reading: Inflation rose to 2.5% in Q1 2025 from 2.2% in Q4, exceeding market expectations but within the Central Bank’s 1.0%–3.0% target band. As in the prior quarter, the largest contributors to Q1’s year-on-year increase in prices were housing rents and local authority rates, while prices for petrol and education fell. Core inflation also registered 2.5%.
Meanwhile, consumer prices rose 0.9% from the previous quarter in Q1, coming in above Q4 2024’s 0.5% rise.
Panelist insight: On the monetary policy implications, ANZ analysts said:
“The trajectory for underlying inflation was broadly in line with our forecast in Q1. However, the outlook is looking a little softer than previously. […] Big picture: a slightly weaker underlying inflation pulse in the near term is nothing the RBNZ can’t fix with a touch of monetary stimulus. We remain comfortable with our expectation that the OCR will trough at 2.5%.”