New Zealand inflation in the second quarter was higher than at any time in 32 years

The New Zealand Bureau of Statistics reported that the consumer price index (CPI) rose by 7.3% year-on-year in the second quarter. This was the highest level in 32 years, driven by rising construction costs and rents.

The rise in inflation to a 32-year high could prompt the Reserve Bank of New Zealand to raise its key interest rate again. It previously raised rates by 0.50% to 2.50% at its July 13 meeting. This marks the sixth consecutive rate hike in an effort to curb inflation.

The Reserve Bank of New Zealand is one of the world’s leading central banks, dropping the massive stimulus measures it had adopted during the coronavirus pandemic to curb steep inflation.

The Reserve Bank of New Zealand had previously forecast that domestic inflation would reach 7% in the second quarter of 2002, above the central bank’s target of 1% to 3%.

Global inflation has skyrocketed as countries have taken stimulus measures to counter the effects of COVID-19, including supply chain disruptions around the world. This situation has prompted central banks around the world to raise interest rates despite the risk of a slowdown in the economy.

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