New Zealand Q2 Inflation Rate Highest Since 2023

Annual inflation in New Zealand accelerated to 4.1% in Q2 2026, from 3.1% in Q1, and was above forecasts of 4.0%, surpassing the RBNZ’s 1–3% target range, marking the highest rate since Q4 2023. The largest contributor was the transport group, where prices jumped 10.6% (vs 3.3% in Q1), mainly driven by petrol (up 27.5%) and other vehicle fuels and lubricants (up 71.0%). The second-largest contributor was the housing and household utilities group, where prices rose 3.6% (vs 3.4% in Q1), with electricity prices rising 12.0%. Meanwhile, faster inflation was also seen in alcoholic beverages and tobacco (2.8% vs 2.3%), clothing (2.5% vs. 1.3%), household contents (0.3% vs 0.0%), and communication (6.8% vs 4.6%), while inflation moderated for food (2.8% vs 4.0%), health (4.0% vs 4.1%), and miscellaneous goods and services (1.0% vs 2.2%). Quarterly, the CPI rose 1.5% in Q2, accelerating from a 0.9% increase in Q1, above estimates of 1.4% and marking the highest level since Q3 2023.

Annual inflation in New Zealand stood at 3.1% in Q1 2026, unchanged from Q4’s 1.5-year high and above forecasts of 2.9%, surpassing the RBNZ’s 1–3% target range. The largest contributors were in the housing and household utilities group, which rose 3.4%, mainly driven by electricity prices (up 12.5%) and local authority rates and payments (up 8.8%). Upward price pressures also came from food (4.0% vs 4.3%), mainly due to higher meat and poultry prices. Transport inflation accelerated (3.3% vs 2.6%), largely driven by increases in private transport supplies and services. Meanwhile, faster inflation was also seen in alcoholic beverages and tobacco (2.8% vs 2.4%), health (4.1% vs 0.7%), and miscellaneous (2.2% vs 2.1%), while it moderated in clothing (1.3% vs 1.7%), communication (4.6% vs 4.8%), and recreation and culture (2.2% vs 3.2%). Education inflation was steady at 2.5%. On a quarterly basis, the CPI increased by 0.9% in Q1, accelerating from a 0.6% rise in the previous quarter.

New Zealand Finance Minister Nicola Willis cautioned on Monday that inflation could climb “much higher” this year and remain outside the central bank’s 1%–3% target if Middle East tensions persist. Treasury modelling suggests a sharper peak under a scenario of prolonged conflict and deeper supply chain disruption. Inflation already stood at 3.1% in Q4, above the ceiling, with rising energy costs fueling market bets on near-term policy tightening. Willis declined to give precise forecasts, noting Treasury has yet to finalize its central scenario.