WELLINGTON, Jan. 23 (Xinhua) -- New Zealand's annual inflation rate increased 3.1 percent in the 12 months to the December 2025 quarter, slightly above the Reserve Bank's 1-3 percent target range, Stats NZ reported Friday.

This photo taken on April 26, 2025 shows the autumn scenery in the Clutha River in New Zealand. (Photo: Xinhua)

The 3.1 percent increase, which follows a 3.0 percent increase in the 12 months to the September 2025 quarter, marks the highest annual rate since the June 2024 quarter, when inflation reached 3.3 percent, said the statistics department.

"While the annual inflation rate has slowed considerably since its most recent peak of 7.3 percent in the June 2022 quarter, it has increased each quarter since the December 2024 quarter, when it was 2.2 percent," Stats NZ prices and deflators spokesperson Nicola Growden said.

Housing and household utilities remained the main drivers, led by electricity prices up 12.2 percent, local authority rates up 8.8 percent, and rents up 1.9 percent, statistics showed.

Food prices also rose sharply, with higher costs for meat, dairy, and eggs, while telecommunications and overseas accommodation recorded notable increases, Stats NZ said.

More than 80 percent of items in the consumer price index basket rose over the past year, the broadest price increases seen in 18 months, Growden said.

Quarterly inflation rose 0.6 percent in the December 2025 quarter, compared with the September 2025 quarter, driven largely by higher international airfares, up 7.2 percent, and petrol prices, which increased 2.5 percent, Stats NZ said, adding that lower prices for seasonal vegetables helped offset some of the rise.