By James Glynn
SYDNEY---New Zealand's inflation rate came in higher than expected in the first quarter, underscoring concerns about the emergence of price pressures across the economy just as the Middle East energy shock was beginning to develop.
The consumer price index rose by 0.9% in the quarter and by 3.1% from a year earlier, Stats NZ said Tuesday. Economists had expected annual inflation would come in closer to 2.9%.
The data affirm the hawkish stance of the Reserve Bank of New Zealand at a recent policy meeting, with Governor Anna Breman warning that the central bank's mandate to bring annual inflation down closer to 2.0% "must be achieved."
Inflation is expected to rise further in the second quarter as the full impact of higher gasoline prices flows through to the data, with economists warning the RBNZ could start to raise the official cash rate in coming months.
Still, some caution is likely given that the economy was just emerging from a sustained economic downturn, leaving it with elevated unemployment and plenty of spare capacity in the first quarter.
The largest upward contributor to the annual inflation rate was electricity, which rose 12.5%, the data showed.
Higher electricity prices accounted for more than a tenth of the 3.1% annual increase, making it the third quarter in a row that electricity was the largest upward contributor to the annual inflation rate, StatsNZ said.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
04-20-26 1949ET
