New Zealand’s consumer price index (CPI) increased 3.1 per cent in the 12 months to the March 2026 quarter.
This is according to the latest data from Stats NZ, which shows that the 3.1 per cent lift is the same as the 3.1 per cent in the 12 months to the December 2025 quarter.
The Reserve Bank of New Zealand’s target band for the annual inflation rate is 1 to 3 per cent, with commentators expecting the NZ cash rate to rise again.
The largest upward contributor to the annual inflation rate was electricity, up 12.5 per cent.
“Higher electricity prices accounted for more than a tenth of the 3.1 per cent annual increase,” prices and deflators spokesperson Nicola Growden said.
“This was the third quarter in a row that electricity was the largest upward contributor to the annual inflation rate.”
Other notable contributors to the annual CPI increase were local authority rates and payments (up 8.8 per cent), meat and poultry (up 8.6 per cent), rent (up 1.2 per cent) and petrol (up 1.1 per cent).
The 1.2 per cent increase in rent was the smallest annual increase in 16 years. Rent increased 1.2 per cent in the 12 months to March 2010.
At its last meeting earlier this month, the RBNZ’s Monetary Policy Committee agreed to hold the official cash rate at 2.25 per cent. They noted that since the February decision, events in the Middle East have materially altered the outlook and the balance of risks for inflation and economic growth in New Zealand.
“In the near term, inflation is expected to increase and the economic recovery to weaken,” RBNZ shared. “The Committee is vigilant to any generalised inflationary pressure and stands ready to act to return inflation to its medium-term target.”
Meanwhile, quarterly CPI rose 0.9 per cent in the March 2026 quarter, compared with the December 2025 quarter. Higher petrol prices were the largest contributor to the quarterly inflation rate, up 3.5 per cent. Petrol prices fell in January and February but rose in March.
“Petrol is the third-largest expense item for New Zealand households after rent and construction,” Growden said.
According to Stats NZ, petrol accounts for around 3.5 per cent of typical household spending, as determined in the 2024 CPI reweight using household spending data.
Prices for pharmaceutical products also increased in the March 2026 quarter – up 17.7 per cent, driven by an increase in prescription charges. The prescription count for the prescription subsidy scheme reset on February 1, 2026, meaning households that had previously exceeded the 20-prescription threshold and were receiving free prescriptions now had to pay the prescription co-payment.
Together, petrol and pharmaceutical products accounted for more than a quarter of the 0.9 per cent quarterly CPI increase.
Excluding the effect of petrol, the CPI rose 0.8 per cent in the March 2026 quarter.
Other large contributors to the quarterly CPI increase were confectionery, nuts, and snacks; fruit; and electricity.
Lower prices were recorded for international air transport, down 7.0 per cent.
“Airfares to Europe, Australia, and the Pacific Islands drove the fall in international airfare prices in the March 2026 quarter,” Growden said.