New Zealand’s CPI reading for Q3 was higher than expected with quarter on quarter figure at 0.9%, beating expectations of 0.7%.
Following a rocky road for New Zealand’s economy, analysts predicted the inflation to come in at 1.7% in Q3 up from last quarter’s 1.5%, but less than the central bank of New Zealand’s target mid-point of 2%.
The New Zealand dollar has been in a falling tend since May 2018, but upon the news the NZD rose 0.5% in response to the strong inflation data, sitting steady at 0.6600.
While the strong inflation comes as a surprise, analysts say it’s unlikely to change the Reserve Bank of New Zealand’s outlook, and predict their decision to keep interest rates to a record low till 2020, will remain unchanged.
The higher inflation in Q3 is due to higher fuel prices and weaker currency, with a 19% on-year jump in petrol prices in September, recording the highest annual increase since 2011.
Stats NZ said this was the first-time petrol prices had risen for four consecutive quarters since September 2008, during the global financial crisis.
The falling exchange rate also made imports more expensive for New Zealand tech consumers, contributing to a 2.6% rise in September’s 2018 quarter, including audio-visual equipment, televisions, cameras and home theatre systems.
A first for the tech sector since 2016.