New Zealand inflation rate stays at 3.1% in January-March
- Sydney (21 April)
New Zealand’s annual inflation rate hit 3.1% in January – March, unchanged from the previous quarter, despite the US-Israeli war in Iran pushing up fuel prices in March, data released by StatsNZ on 21 April show.
Electricity, local government rates, and meat prices rose by 13%, 8.8%, and 8.6% on the year, respectively, over the quarter.
Power prices could rise by 5% on an annual basis in 2026, largely because of transmission costs, Consumer NZ said in February. “Power bills are hiking up because of an increase in lines charges’ costs – that’s the cost of delivering power to your house,” Consumer NZ’s Powerswitch Manager Paul Fuge said at the time.
Petrol prices rose 1.1% on the year in January-March, data from StatsNZ show. They fell in early 2026 but rose by 14% on the year in March because of maritime disruptions, StatsNZ data show.
Iran closed the Strait of Hormuz – a narrow maritime passage that enables crude oil to flow from the Persian Gulf – after the US and Israel attacked it on 28 February.
New Zealand’s 3.1% annual inflation rate in January – March exceeded the Reserve Bank of New Zealand’s (RBNZ) expectations. The central bank forecasted a 3% inflation rate for the quarter on 8 April, when it held New Zealand’s overnight cash rate at 2.25%.
RBNZ’s inflation forecast was based on commodity assumptions informed by oil prices and oil futures prices as of 7 April. If oil prices fall faster than futures markets expect, the bank’s forecasts could be on the high side, RBNZ Governor Anna Breman said at the time.
Brent crude futures prices – which impact petrol production costs – have declined since the start of April, because of a two-week ceasefire between the US, Israel, and Iran. Futures prices fell from $101.16/barrel on 1 April to $98.20/barrel on 21 April, but remain up from just $65.80/barrel on 21 April 2025, data from Trading Economics show.
Disruptions around the Strait of Hormuz have also begun to impact other production inputs. On 16 April, New Zealand producer Fletcher Buildings told investors that it may increase plastics prices by up to 36% because of the Iran war.
The company – like many other global plastics producers – partly relies on chemical feedstocks from the Persian Gulf, which need to pass through the Strait.
By Avinash Govind