Data released by Statistics New Zealand earlier on Thursday showed that New Zealand’s consumer price index rose 2.2 percent year-on-year in the first quarter of this year, the highest annual rise since the first quarter of September 2011. Data beat market expectations at 2 percent.
It is for the first time the RBNZ under Governor Wheeler has ‘achieved’ the mid-point of its 1-3 percent target band. On a quarter-on-quarter basis, the consumer price index was up 1 percent in the first quarter after a 0.4 percent rise in the fourth quarter of 2016. This is above the market expectations of a rise of 0.8 percent.
Statistics New Zealand senior manager Jason Attewell stated that increasing prices of petrol along with the annual increase in tax of cigarette and tobacco lifted inflation. Adjusting for seasonal effects, consumer price inflation rose 1 percent.
"We don’t see the Bank shifting to a hawkish stance until inflation expectations shift higher. The Bank’s near-term CPI profile will be lifted in the May Monetary Policy Statement but is unlikely to change over the medium-term," said ANZ in a report.
