{"id":4230,"date":"2026-01-23T17:37:52","date_gmt":"2026-01-23T17:37:52","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2026\/01\/23\/kiwi-stays-afloat-as-new-zealand-inflation-cooled-to-0-6-in-q4-2025\/"},"modified":"2026-01-23T17:37:52","modified_gmt":"2026-01-23T17:37:52","slug":"kiwi-stays-afloat-as-new-zealand-inflation-cooled-to-0-6-in-q4-2025","status":"publish","type":"post","link":"https:\/\/ft365.org\/index.php\/2026\/01\/23\/kiwi-stays-afloat-as-new-zealand-inflation-cooled-to-0-6-in-q4-2025\/","title":{"rendered":"Kiwi Stays Afloat As New Zealand Inflation Cooled to 0.6% in Q4 2025"},"content":{"rendered":"
\n

New Zealand\u2019s consumer price inflation dipped from 1.0% to 0.6% on a quarterly basis in Q4 2025, bringing the annual rate to 3.1%. This surpassed both market expectations of a 0.5% quarter-on-quarter gain and the Reserve Bank of New Zealand\u2019s forecasts, as elevated domestic price pressures continued to offset weaker international pricing.<\/p>\n

Key Takeaways<\/strong><\/h2>\n
    \n
  • Annual headline CPI rose 3.1% year-on-year<\/strong>, up from 2.7% in September 2025. Quarterly inflation registered 0.6%, exceeding market and RBNZ forecasts by a tenth of a percentage point.<\/li>\n
  • Domestic vs. International Pressures:<\/strong> Non-tradeable inflation, which reflects domestic demand and supply conditions, increased 3.5% annually but showed signs of moderation. Tradeable inflation, influenced by foreign markets, rose 2.6% over the year, indicating persistent external price pressures despite global economic headwinds.<\/li>\n
  • Major Contributors:<\/strong> International air transport surged 7.2% in the quarter, contributing 20% to the overall quarterly rise. Petrol prices increased 2.5%, accounting for 13.2% of the quarterly movement. Telecommunication services rose 2.8%, contributing 9.1% to the headline figure.<\/li>\n
  • Offsetting Factors:<\/strong> Vegetable prices plummeted 16.5%, providing a substantial -34.6% offset to the quarterly increase. Pharmaceutical products fell 4.3%, contributing -4.7% to the quarterly change.<\/li>\n
  • Annual Drivers:<\/strong> Electricity costs jumped 12.2%, contributing 10.3% to the annual inflation rate. Local authority rates climbed 8.8%, accounting for 8.7% of the yearly increase. Actual rentals for housing rose 1.9%, contributing 6.9% to the annual figure.<\/li>\n
  • Core Inflation Remains Sticky:<\/strong> The measure excluding food, household energy, and vehicle fuels rose 0.8% quarterly and 2.5% annually, suggesting underlying price pressures remain resilient despite significant spare capacity in the economy.<\/li>\n<\/ul>\n

    Link to official Stats NZ Quarterly CPI (December 2025 Quarter)<\/strong><\/p>\n

    Despite the modest inflation overshoot, the underlying narrative suggests continued disinflationary momentum in the domestic economy.<\/p>\n

    Non-tradeable inflation, while still elevated at 3.5%, showed further deceleration from previous quarters, indicating that weak domestic demand and spare economic capacity are gradually eroding persistent price pressures.<\/p>\n

    Furthermore, the data reflected divergence between tradeable and non-tradeable inflation components. Tradeable inflation rose 0.7% in the December quarter and 2.6% annually, while non-tradeable inflation increased 0.6% quarterly and 3.5% over the year. This contrast highlights the different dynamics at play between domestically-driven prices and those influenced by international markets.<\/p>\n

    \n

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    Market Reactions<\/h2>\n

    New Zealand Dollar vs. Major Currencies: 5-min<\/strong><\/p>\n

    The New Zealand dollar exhibited initial strength following the data release before fading its initial gains roughly an hour later. Still, the currency was able to recover above pre-CPI levels and sustain a more gradual bullish trajectory as the Asian session went on.<\/p>\n

    The Kiwi appreciated approximately 0.34% against the Japanese yen, likely reflecting the yen\u2019s broader weakness amid diverging global monetary policy expectations. Against other major currencies, the NZD showed more modest gains against the British pound (+0.16%), euro (+0.12%), US dollar (+0.12%), and Swiss franc (+0.12%) while keeping rallies limited against AUD (+0.11%).<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

    New Zealand\u2019s consumer price inflation dipped from 1.0% to 0.6% on a quarterly basis in Q4 2025, bringing the annual rate to 3.1%. This surpassed both market expectations of a 0.5% quarter-on-quarter gain and the Reserve Bank of New Zealand\u2019s forecasts, as elevated domestic price pressures continued to offset weaker international pricing. Key Takeaways Annual<\/p>\n","protected":false},"author":2,"featured_media":4231,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-4230","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news"],"featured_image_urls":{"full":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405.png",780,405,false],"thumbnail":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405-150x150.png",150,150,true],"medium":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405-300x156.png",300,156,true],"medium_large":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405-768x399.png",640,333,true],"large":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405.png",640,332,false],"1536x1536":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405.png",780,405,false],"2048x2048":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405.png",780,405,false],"morenews-featured":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405.png",780,405,false],"morenews-large":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405.png",780,405,false],"morenews-medium":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405-590x405.png",590,405,true],"crawlomatic_preview_image":["https:\/\/ft365.org\/wp-content\/uploads\/2026\/01\/4230-nzd-inflation-news-2026-01-23-780x405-260x135.png",260,135,true]},"author_info":{"display_name":"henry","author_link":"https:\/\/ft365.org\/index.php\/author\/henry\/"},"category_info":"Latest News<\/a>","tag_info":"Latest News","comment_count":"0","_links":{"self":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/4230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/comments?post=4230"}],"version-history":[{"count":0,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/4230\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media\/4231"}],"wp:attachment":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media?parent=4230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/categories?post=4230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/tags?post=4230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}