New Zealand Warns Inflation May Rise Higher
New Zealand Finance Minister Nicola Willis has warned that inflation could rise far more sharply this year if the Iran war continues and causes deeper disruption to global supply chains. Her comments come as energy prices remain under pressure and policymakers assess the economic fallout of a prolonged conflict in West Asia.
New Zealand Warns Of Higher Inflation Risk
Willis said Treasury modelling shows inflation could peak above earlier expectations under a scenario where the conflict lasts longer and causes wider supply disruptions. She said inflation would likely move well beyond the central bank’s preferred range and remain elevated for longer than previously projected. The warning highlights how the war is beginning to affect economies far from the immediate conflict zone.
Supply Chain Disruption And Energy Costs In Focus
The minister linked the inflation threat to deeper supply chain problems and rising energy costs, both of which could push up prices across transport, goods and household essentials. With oil markets already reacting to regional instability, governments such as New Zealand are being forced to consider how prolonged volatility could worsen domestic cost-of-living pressures.
Government Weighs Fuel Supply Options
New Zealand is also reportedly considering the possibility of importing Russian oil if it is refined elsewhere, showing the pressure governments are facing to secure alternative energy supplies during the crisis. The inflation concern comes after fourth-quarter data showed inflation at 3.1 percent, above the central bank’s target band of 1 to 3 percent, leaving policymakers with limited room if fuel prices continue climbing.
