New Zealand inflation accelerated more than economists expected in the second quarter to a fresh 32-year high.
(Bloomberg) — New Zealand inflation accelerated more than economists expected in the second quarter to a fresh 32-year high.
Annual inflation quickened to 7.3% from 6.9% in the first quarter, government data showed Monday in Wellington. Economists forecast 7.1%. Consumer prices advanced 1.7% from three months earlier, exceeding the 1.5% median estimate.
Central banks around the world are rapidly raising interest rates to regain control of inflation, which is spiraling as demand outstrips supply amid pandemic bottlenecks and the war in Ukraine. New Zealand’s Reserve Bank last week delivered its third straight half percentage point increase, taking the Official Cash Rate to 2.5%, and said it will keep tightening policy “at pace.”
The New Zealand dollar rose after the release of the data. It bought 61.78 US cents at 11:30 a.m in Wellington, up from 61.53 cents beforehand.
Annual inflation is running at the fastest since the second quarter of 1990, when it reached 7.6%. The RBNZ targets the midpoint of a 1-3% range over the medium term.
In May, the central bank forecast inflation would peak at 7% this year then ease back to the top of its band by late 2023. However, last week it said there was “a near-term upside risk” to inflation.
- Prices for construction of new houses were up 4.5% for the quarter and 18% for the year
- Gasoline prices rose 6.2% in the quarter and 32% for the year
- Food prices gained 1.3% in the quarter and 6.5% for the year
- Tradables prices increased 1.9% from the previous quarter and 8.7% for the year
- Non-tradable prices rose 1.4% from the previous quarter and 6.3% from a year earlier
- Consumer prices excluding food, fuel and energy rose 6.1% from a year earlier. The RBNZ publishes its own core inflation measure later Monday
(Updates with details)