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New Zealand Consumer Prices Expected to Climb 1.5% in June Quarter, Westpac Says

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New Zealand consumer prices are expected to climb by 1.5% in the June quarter as the Middle East conflict drives oil prices up, Westpac said in a report on Friday.

The rise would see the annual inflation rate rising to 4.1% from 3.1%, the highest level in two years, said Satish Ranchhod, Westpac NZ senior economist.

Petrol prices have risen 20% over the quarter and diesel prices were up 51%, with recent months also seeing further increases in household energy prices.

While core inflation has been softening, it remains above the 2% target midpoint even as economic growth slows and the labor market shows signs of softness.

Westpac said its forecast aligns with the Reserve Bank's updated projection of 3.9% annual inflation, per the report.

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