Inflation has risen 4.1% in the year to June, driven by a spike in petrol prices caused by the conflict in the Middle East.
It was the highest annual inflation rate in over two years.
Petrol was up 27.5% year-on-year, which contributed 23.5% to the inflation rise.
Electricity was up 12%, which contributed 8.4% to the overall rate. Diesel was up 71%, which contributed 7.7%.
Lower prices were recorded for oils and fats, which were down 9.1%, and real estate services which were down 4.6%.
According to Stats NZ, New Zealand’s inflation rate was higher than that of Australia, UK, US, and the European Union, but was below the OECD average of 4.6%.
Stats NZ prices and deflators spokesperson Nicola Growden said higher petrol prices accounted for "almost a quarter of the 4.1% annual increase".
Some 'encouraging numbers' – Willis
Finance Minister Nicola Willis said without the changes to petrol and diesel prices, annual inflation would have been 2.9%, and within the target range for inflation.
"There are encouraging numbers in this release, with annual food price inflation falling from 4% to 2.8%. Annual rent increases were only 0.5% across the year, the lowest for almost 25 years," she said.
"What today’s data underscores is the need for continued fiscal discipline. New Zealand is not immune to global shocks but as a Government we must focus on controlling what is within our control."
Speaking to media from the Beehive this afternoon, Willis added: “It’s difficult to predict the future when Donald Trump is the president.”
Luxon has 'made it worse' – Labour
Labour Party finance and economy spokesperson Barbara Edmonds said Prime Minister Christopher Luxon had promised to fix the cost of living, but had "made it worse".
"Inflation is now at 4.1%, the highest it’s been in two years, and New Zealanders are paying the price."
“This isn’t about politics, it's about whether families can afford the basics. Food prices have risen across every major category over the past year. Milk, bread and mince all cost more, while wages aren't keeping up."
'Imported inflation' – ACT
ACT leader David Seymour said today's inflation figure was a reminder of why New Zealand needs to "cut waste and grow the country".
"New Zealanders did not cause the latest global inflationary shock. Conflict in the Middle East and disruption to international energy markets have pushed up costs around the world.
"The data confirms the increase in annual inflation was driven overwhelmingly by imported inflation. We cannot control that, but an overseas shock does not absolve the New Zealand Government of responsibility. It makes discipline at home even more important."
Was this expected?
Economists had expected the annual rate to hit at least 4%. The Reserve Bank of New Zealand had estimated 3.9%.
The rise gives way to the prospect of more hikes to the OCR by the Reserve Bank, which had previously signalled was likely.
Speaking to RNZ yesterday, Westpac senior economist Satish Ranchhod said the the top end of the forecast range was 4.1%.
"The underlying detail will be a key interest. The RBNZ will be watching closely for signs that high fuel prices are spilling over into other prices, especially with global oil prices taking another step higher recently."
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