The consumers price index rose 1 per cent in the three months to March 31 for an annual pace of 2.2 per cent.
It was highest annual increase since the September 2011 quarter and also marked the first time inflation has hit the mid-point of the central bank’s 1 per cent-to-3 per cent target range since that period.
Economists had tipped the CPI to lift 0.8 per cent in the first three months of the year, for an annual rate of 2 per cent, according to the median in a BusinessDesk poll.
The central bank, meanwhile, had forecast inflation of 0.3 per cent in the first quarter for an annual rise of 1.5 per cent. It wasn’t expecting inflation to be 2 per cent until 2019, according to its latest forecast.
“Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation,” prices senior manager Jason Attewell said.
Petrol prices rose 4.1 per cent in the quarter and were up 12 per cent on the year. A slump in oil prices and resilient New Zealand dollar has kept a lid on headline CPI, however, inflation pressures are emerging as the dollar loses ground and fuel prices rise.
We were in serious danger of hitting deflation late last year, but the Government has fixed this by raising excise taxes on all the ‘unethical’ stuff. Apart from a poor vegetable harvest due to rain, most of the other prices have been fairly static.
Average wage growth is also 2%.
– NZN via Yahoo! News
Since you’re here … we’ve got a favour to ask. Advertising revenues across media are falling fast. And unlike other news organisations, we haven’t put up a paywall – we want to keep our work available to everyone. Please Click Here Now to subscribe to an ad-free Whaleoil. Your contribution helps us survive in a hostile market.