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New Zealand's March-Quarter Inflation Beats Expectations

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New Zealand's annual consumer inflation increased 3.1% in the March quarter, according to data from Stats NZ released Tuesday.

Annual inflation for the quarter surpassed the 2.9% consensus forecast, according to Trading Economics. Westpac NZ Senior Economist Satish Ranchhod also forecast a 2.8% rise.

The figure was unchanged from the 3.1% increase in the 12 months to the December 2025 quarter, the department said.

The result also exceeded the Reserve Bank of New Zealand's (RBNZ) updated forecast from its April policy update for 3% annual inflation, Westpac NZ's Ranchhod said.

The figures also point to a higher headline inflation forecast by RBNZ Governor Anna Breman in a speech back in March.

Electricity prices surged 12.5%, equivalent to more than 10% of the increase, Stats NZ's Prices and Deflators Spokesperson Nicola Growden said.

This is the third straight quarter of electric power being the biggest contributor to annual inflation, according to Growden.

Local authority rates and payments jumped 8.8% in the March quarter, contributing 8.7% to the inflation increase.

Meat and poultry prices grew 8.6% during the quarter and contributed 6.4% to the annual inflation rise.

Rent went up 1.2%, with prices comprising 4.6% of the total inflation rise, and gasoline prices edged up 1.1%, equivalent to a 1.3% contribution to inflation, Stats NZ said.

Quarterly inflation jumped 0.9% in the March 2026 quarter compared with the December 2025 quarter, according to the department.

"Petrol is the third-largest expense item for New Zealand households after rent and construction," Growden said in a statement.

Gasoline prices comprised 3.5% of typical household spending, according to Stats NZ, citing the 2024 CPI reweight which used household spending data.

Pharmaceutical products increased 17.7% during the quarter due to a rise in prescription charges, the Stats NZ report said.

Looking ahead, Westpac and the Reserve Bank of New Zealand expect inflation to peak to 4.3% in the June quarter before returning to 3.9% at the end of the year.

"Today's result suggests upside risk to those forecasts," Ranchhod said in his analysis.

In June, oil prices, as well as related transportation and other costs, could weigh on inflation figures, Ranchhod said.

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