New Zealand’s Annual Inflation Touches Three Decade High in Q4 2021
New Zealand’s Annual, New Zealand is the latest country to report a surge in inflation; a factor that is raising uncertainties in economic recovery around the world amid the increase in energy costs and global supply chain disruptions due to the pandemic. According to data released by Statistics New Zealand; annual inflation was up by 5.9% in Q4 2021 after the previous quarter’s reading of 4.9%.
This was the highest pace of increase in annual inflation seen in over three decades. New Zealand’s CPI came in at +1.4% for the final three months of last year, easing slightly lower from Q3’s reading of 2.2%.
Economists had forecast a reading of 1.3% for the CPI and of 5.7% for the annual inflation. The data not only; beat this forecast but also came in higher than the RBNZ’s expectations for a quarterly increase of 1.2% and an annual increase of 5.7% in inflation.
Inflation spiked in New Zealand on the back of rising transportation costs and housing prices. Construction and rentals for housing climbed higher during A4 2021 while petrol prices increased by; 30% YoY during the period.
New Zealand’s Annual, Impact on the New Zealand Dollar
The stronger than expected inflation readings failed to make much of an impact on the NZD. This was because investors are already expecting the RBNZ to tighten monetary policy in the wake of high inflation, especially during the first half of 2022.
New Zealand’s Annual, At the time of writing, NZD/USD is trading at around $0.661. The RBNZ has already implemented two rate hikes since the beginning of the pandemic and has signaled interest in further hawkishness in an attempt to maintain inflation within its target of 1-3%.