New Zealand Inflation Rises to 3% in Q3, Matching RBNZ Forecasts

New Zealand’s annual inflation rate accelerated to 3.0% in the third quarter of 2025, aligning with analysts’ expectations and reaching the upper limit of the Reserve Bank of New Zealand’s (RBNZ) target range. According to official data from Statistics New Zealand, the consumer price index (CPI) increased by 1.0% from the previous quarter, doubling the 0.5% growth recorded in the second quarter and consistent with forecasts from a Reuters poll.

The RBNZ, which aims to maintain inflation between 1% and 3% over the medium term, had previously projected a 3% inflation rate for the quarter. In August, the central bank cut its cash rate by 50 basis points to 2.5%, citing growing concerns about economic weakness despite persistent price pressures. The RBNZ noted earlier this month that while inflation was edging higher, the existing slack in the economy is expected to bring it back to the 2% midpoint target by mid-2026.

ANZ senior economist Miles Workman commented that inflation trends remain broadly in line with the central bank’s expectations. He emphasized that underlying inflation is slowing as forecast, suggesting that the recent rise does not pose a significant policy challenge. Non-tradeable inflation, which reflects domestic cost pressures, eased slightly to 3.5% from 3.7% in the previous quarter.

The New Zealand dollar remained stable, trading at $0.5732 following the data release. Statistics New Zealand attributed the price surge mainly to rising electricity costs, rent, and local government taxes. Electricity prices, in particular, have seen their steepest annual increase since the late 1980s amid sector reforms.

Analysts also noted that global uncertainties, including U.S. trade tariffs and geopolitical tensions, continue to influence inflation expectations and shape monetary policy decisions.