FX.co ★ New Zealand Inflation Rate Misses Expectations in Q2

In the second quarter of 2025, New Zealand experienced a slight uptick in its annual inflation rate, which rose to 2.7% from 2.5% in the first quarter, although it fell just short of the market forecast of 2.8%. The annual increase was largely driven by rises in local authority rates and payments, which went up by 3.2% and accounted for 12.9% of the overall inflation rise. Additionally, rents and electricity prices each increased by 3.2% and 8.4%, contributing 12.5% and 8.4% to the inflation increase, respectively. These gains were partly counteracted by notable decreases in petrol and early childhood education costs. Specifically, petrol prices decreased by 8%, reducing the index by 12.8%, while the cost of early childhood education dropped by 22.8%, contributing -4.7%. The decline in early childhood education expenses reflects the effect of the FamilyBoost childcare payment, which was implemented on July 1, 2024. On a quarterly basis, the Consumer Price Index rose 0.5% in the June quarter, slowing down from a 0.9% increase in the first quarter and falling short of the anticipated 0.6% rise.