New Zealand inflation rises to 3.4 per cent

Business Materials 15 April 2008 04:58 (UTC +04:00)

Rising petrol and food prices lifted New Zealand's official inflation rate to 3.4 per cent for the 12 months ending March 31, Statistics New Zealand announced Tuesday. ( dpa )

The rate was up from 3.2 per cent for 2007 and 1.8 per cent for the 12 months ending September 30, with a 20.5 per cent increase in petrol prices as the most significant single factor driving the increase in prices, the agency said.

If petrol prices had remained constant over the previous 12 months, the consumer price index (CPI) would have risen only 2.5 per cent, Statistics New Zealand said.

CPI rose 0.7 per cent in the March quarter, mainly because of a 1.8 per cent rise in food prices, especially bread, butter and cheese.

Analysts said that rising inflation would almost certainly stop the central bank cutting its benchmark interest rate, one of the highest in the world at 8.25 per cent, despite signs of a sharp economic downturn.