New Zealand’s inflation hit a new 32-year high in the second quarter, beating economists’ expectations.
Government data in Wellington showed on Monday that annual inflation rose to 7.3% from 6.9% in the first quarter. Economists had predicted 7.1%. Consumer prices advanced 1.7% from the previous three months, above the average estimate of 1.5%.
Central banks around the world are rapidly raising interest rates to regain control of inflation, which has been rising as demand outstrips supply amid disruptions from the pandemic and the war in Ukraine. The Reserve Bank of New Zealand delivered its third straight half-percentage point hike last week, raising the official cash rate to 2.5%, and said it would continue to tighten policy “at pace”.
The New Zealand dollar rose after the data release. It bought 61.78 cents to the dollar at 11:30 am in Wellington, down from 61.53 cents earlier.
Annual inflation is registering its highest level since reaching 7.6% in the second quarter of 1990. The RBNZ is targeting the middle of the 1-3% range over the medium term.
In May, the central bank predicted that inflation would rise to 7% this year and return to the top of its band by the end of 2023. However, it said last week there was a “short-term upside risk” to inflation. .
Other information
-New home construction prices rose 4.5% for the quarter and 18% for the year
-Gasoline prices rose 6.2% in the quarter and 32% in the year
-Food prices rose 1.3% for the quarter and 6.5% for the year
Traded goods prices rose 1.9% quarter-on-quarter and 8.7% year-on-year
Non-trade prices increased 1.4% compared to the previous quarter and 6.3% compared to the previous year.
Consumer prices, excluding food, fuel and energy, rose 6.1% from a year earlier. The RBNZ releases its own headline inflation on Monday.
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