New Zealand’s inflation hit 3.1% in December 2025, exceeding its target, due to rising energy, rent, and travel costs.

New Zealand's annual inflation rate rose to 3.1% in the December 2025 quarter, the highest since mid-2024 and above the Reserve Bank's 1% to 3% target, owing to increases in electricity, rent, local authority rates, airfares, and telecommunications. The quarterly CPI increased by 0.6%, driven by higher international travel costs and gasoline prices, while vegetable and pharmaceutical prices fell. Despite a recent rate cut to 2.25%, the central bank may reconsider further hikes if inflation remains high.