🇳🇿❗️Cable FX Macro Weekly Note: N.Z. Q3 Inflation Rate

**As seen in Risk In The Week report 10/17/25, get full access now! 

As of now, inflation remains within the Reserve Bank of New Zealand's (RBNZ) 1–3% target band but is trending toward the upper end, driven by administered prices (e.g., council rates), food costs, and energy. The RBNZ projects headline CPI at 3.0% for the September quarter, reflecting temporary pressures, before easing to the 2% midpoint by mid-2026. Headline CPI rose 0.5%Q/q , down from 0.9% in the March quarter. Annually, it increased to 2.7%, up from 2.5% in the prior quarter. Tradables inflation rose 1.2% Y/y, contributing to upside pressures, non-tradable prices cooled down on the quarter.

Inflation has stabilized after peaking at 7.3% in mid-2022, averaging 2.6% over the past decade. Key drivers include global supply chains (tradables) and domestic costs (e.g., wages, utilities). The economy contracted sharply in Q2 2025 (GDP down more than expected), creating spare capacity to ease pressures.

Analysts at BNZ think inflation is poised to fall from its third- quarter peak at 3%, as the current bout of inflation gradually unwinds. The quarterly CPI estimate has been revised down to 0.9% from 1%, concurrent with the Reserve Bank of New Zealand's forecast. While its annual estimate remains at 3%, BNZ added. Analysts warned that rising fuel prices remain a risk, and a weaker New Zealand dollar continues to put pressure on tradeable prices, including fuel prices.