New Zealand is past the worst of its COVID-19 inflation nightmare, with a welcome dip to six per cent recorded in its latest figures.
Headline inflation, as measured by the consumers price index (CPI) by Stats NZ, fell from 6.7 per cent in the March quarter.
CPI peaked at 7.3 per cent in June last year and has doggedly stayed high.
The latest inflation figure is a tick above market expectations.
The aggregate of economist predictions, as reported by the NZ Herald, was for a quarterly rise of 0.9 per cent, producing an annual figure of 5.9 per cent.
The Reserve Bank (RBNZ)‘s forecast was for 6.1 per cent.
Food was the biggest contributor to inflation over the past year, with Stats NZ noting big jumps in the price of vegetables, ready-to-eat food, and milk, cheese, and eggs.
The cost of food has soared well above the CPI figures, with annual rates above 10 per cent as measured monthly since October.
That rise has been, at least in part, attributed to savage weather events that hit NZ agriculture over summer, decimating crops.
Inflation is just above the Australian CPI, which was up by 5.6 per cent in the 12 months to May.
Just as it did in Australia, inflation prompted NZ’s central bank into a unprecedented streak of official cash rate (OCR) rises.
From emergency lows of 0.25 per cent in October 2021, the RBNZ hiked rates even beyond Australian peaks, to 5.5 per cent with 12 consecutive rises.
That run was ended at last week’s meeting, when rates were kept on hold for the first time in nearly two years.
The new figures are not expected to prompt an RBNZ reversal and OCR cut.
At six per cent, CPI is still well above the bank’s target band of 1-3 per cent.