WELLINGTON, April 20 (Xinhua) -- New Zealand's consumer inflation surged beyond expectations in the quarter ending March, driven by petrol prices and tobacco taxes, the government statistics agency said Thursday.
The consumers price index (CPI) rose by 2.2 percent in the year to the end of March quarter, according to Statistics New Zealand.
It was the highest annual increase since the September 2011 quarter, when the goods and services tax - a sales tax - rose from 12.5 percent to 15 percent.
"Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation," prices senior manager Jason Attewell said.
"Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year."
Housing-related prices were up 3.3 percent, while transport prices rose 3.5 percent.
Excluding petrol, and cigarettes and tobacco, the CPI registered a 1.5-percent increase.
The CPI rose 1 percent in the March 2017 quarter from the December 2016 quarter, when it rose by 0.4 percent.
The Council of Trade Unions said the 1-percent overall rise in prices was larger than expected, and was concentrated mainly in necessities that hit the budgets of low- and middle-income households hardest.
"People will be anxious to see their wages and salaries rise to at least recoup the 2.2-percent rise for the year," CTU economist Bill Rosenberg said.
"The labor cost index rose only 1.6 percent in the year to December and the average wage only 1.3 percent," said Rosenberg.
An economic note from the ASB Bank said the CPI rise exceeded the expectations of the market and the Reserve Bank of New Zealand (RBNZ), although it was expected to be temporary.
The sharp recovery in inflation had taken inflation expectations back to the middle of the RBNZ's target band of 1 percent to 3 percent, "removing one of the RBNZ's key concerns of recent years," it said.
"Nonetheless, we expect annual inflation to hover around 1.5 percent and 2 percent over the next few years."
The ASB expected the RBNZ will lift its official cash rate - currently on an historic low of 1.75 percent - in late 2018, around a year earlier than the RBNZ anticipated in its February review.