NZ Inflation Remains Steady as Experts Warn of Building Pressures
New Zealand's inflation rate remained steady in August, but experts warn that underlying pressures are building and could lead to higher prices ahead.
According to Stats NZ, international airfares rose 4.3% in August compared to July, with annual increases of 21.5%. Petrol prices also climbed 2.0% over the month and are up 17.9% annually, while diesel prices increased by 8.6% and 45.8% respectively.
However, a seasonal 6.1% fall in accommodation costs offset these increases, keeping overall monthly prices flat. But economists at ASB and Westpac say the underlying trend points to firmer inflation ahead, with annual CPI expected to hold above 4% into late 2026.
ASB senior economist Mark Smith said that 'higher costs appear to be winning' in influencing core inflation, while Westpac senior economist Satish Ranchhod noted that fuel costs have taken a step higher due to tensions in the Middle East.