New Zealand first-quarter inflation rate rises to 30-year high

div classBodysc17zpet90 cdBBJodivpBy Lucy Craymerp

pWELLINGTON Reuters – New Zealand‘s annual consumer price index CPI hit a threedecade high in the first quarter, underlining the central bank’s hawkish stance to contain price pressures bubbling in the economy.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pAnnual inflation rose 6.9 from 5.9 in the previous quarter, the fastest rate since a 7.6 annual increase in the year to the June quarter of 1990, Statistics New Zealand said in a statement on Thursdayp

pCPI rose 1.8 in the quarter ending March from a 1.4 rise in the fourth quarter. But the data was below economists expectations in a Reuters poll for a 2.0 rise for the quarter, with an annual rise of 7.1.p

pRising prices for food, construction and housing is fuelling surging inflation, said Statistics New Zealand.p

pPrices for the construction of new dwellings increased 18 in the March 2022 quarter compared with the March 2021 quarter, the largest increase recorded since the series began in 1985.p

p“Construction firms have been experiencing many supplychain issues, higher labour costs, and also higher demand, which have pushed up the cost of building a new house,” senior prices manager Aaron Beck said.p

pThe kiwi dollar eased 0.4 to 0.6772, from 0.6804 just before the data hit dealing screens. Twoyear swap rates dipped as much as six basis points to 3.52 as the market reconsidered the chance of another halfpoint rate hike.p

pThe Reserve Bank of New Zealand, which met last week, has been vocal about its concern around inflation expectations in New Zealand and the need to get out ahead of it. The central bank has increased the cash rate at four consecutive meetings and signalled there will be further increases in coming quarters.p

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pp Reporting by Lucy Craymer Editing by Chris Reese, Bernard Orrp

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