**New Zealand Consumer Price Index (CPI) Announced: Annual Inflation Aligns with Projections at 3% in Q3**
*Original source: Eren Sengezer, FXStreet*
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**Summary of Announcement**
The New Zealand Consumer Price Index (CPI) data for the third quarter (Q3) has met economist expectations, showing an annual inflation rate of 3%. The official data, released by Statistics New Zealand, confirms the steady trend of consumer price changes in the country amid persistent global economic uncertainties.
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**Detailed Analysis of the CPI Report**
**Key Details from the CPI Release:**
– The CPI increased by 3.0% year-over-year (YoY) in the third quarter of 2025.
– The quarter-over-quarter (QoQ) rise was 0.6%, following a 1.0% QoQ advance in the previous quarter.
– The annual increase matches the market consensus, based on surveys of economists and financial analysts.
**Breakdown of Major CPI Components:**
*According to official data, some components contributed more significantly to the overall CPI growth:*
– **Housing and household utilities:**
– The largest driver of annual inflation.
– Higher local authority rates and rentals for housing contributed notably.
– **Food:**
– Upward trend in the prices of vegetables, dairy products, and restaurant meals.
– **Transport:**
– Increases in spare parts and repairs for vehicles.
– A drop in international airfares and fuel prices partially offset other increases.
– **Recreation and culture:**
– Modest increases observed.
– **Clothing and footwear:**
– Experienced relatively little change.
– **Communication:**
– Costs remained nearly flat.
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**Context: The Inflation Journey in New Zealand**
Over the past two years, New Zealand, like other advanced economies, has faced unusual volatility in inflation due to:
– The lingering effects of the COVID-19 pandemic on supply chains.
– Tight labor market conditions pushing up wages.
– The global rise and fall in commodity prices.
– Disruptions caused by extreme weather, including floods and cyclones, affecting agricultural output and supply chains.
Previously, the country’s annual inflation rate peaked at 7.3% in the second quarter of 2022, its highest since mid-1990. Since then, a gradual but steady decline toward the Reserve Bank of New Zealand’s (RBNZ) 1-3% target band has been observed.
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**Market Expectations and Reactions**
After the release of the Q3 data:
– The New Zealand dollar (NZD) exhibited limited short-term movement.
– Market participants viewed the inflation numbers as largely anticipated and priced in.
– Analysts agree that while headline inflation has moderated, it remains at the upper boundary of the RBNZ’s target range.
**How the Market Interprets the Data:**
– **Stable NZD:** No significant moves
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