On Wednesday, Stats NZ's latest consumers price index (CPI) data showed headline inflation was at four per cent for the year to March 2024, and at 0.6 per cent for Q1 2024.
Housing costs, in particular rent, were a major factor keeping inflation high, with domestic, or non-tradeable, inflation at 5.8 per cent in the last year.
Tradeable inflation is running in reverse, with -0.7 per cent growth over the last quarter.
The overall CPI figure lands in the mid-point of market expectations, with ANZ tipping annual inflation at four per cent, Kiwibank predicting 4.2 per cent, and the Reserve Bank (RBNZ) forecasting an optimistic 3.8 per cent.
The reduced price costs mean NZ is on track to contain inflation - which soared to 7.3 per cent in 2022 - by year's end.
The RBNZ believes the CPI will return to its preferred bracket of one to three per cent by Q3 this year, which will be known in October.
It's only then most analysts believe the RBNZ will consider lowering the official cash rate (OCR), and reduce the burden on Kiwi mortgage-holders.
Higher than expected domestic inflation is unlikely to hurry the central bank to cut rates.
"The RBNZ will be very wary of the risk of inflation being stuck above three per cent," ASB senior economist Kim Mundy said.
"We now expect the RBNZ to wait until February 2025 to cut the OCR."
The RBNZ has raised the OCR to 5.5 per cent in a bid to crush inflation - and Wednesday's figures show that is working.
It is the lowest annual rate of inflation since it was measured at 3.3 per cent in the year to June 2021.
Led by rents and rates, housing costs were the largest contributor to price rises.
Rent prices grew by 4.7 per cent in the last year, with construction costs up 3.3 per cent and council rates jumping 9.8 per cent.
"Rent prices are increasing at the highest rate since the series was introduced in September 1999," Stats NZ spokeswoman Nicola Growden said.
There was relief for travellers, with a 2.3 per cent decrease in petrol prices and a 10.3 per cent decrease in international airfares.
Waste-watch group the Taxpayers Union pointed to non-tradeable inflation as an argument for Finance Minister Nicola Willis to cull public spending in its May 30 budget.
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