The consumer price index (CPI) rose 0.1% in the December quarter and 1.9% in the year to December, according to Statistics New Zealand.
These headline figures didn't surprise financial markets, which expected lower oil prices to ease cost pressures and see the CPI go up a little less than forecast by the Reserve Bank (RBNZ).
The RBNZ in its November Monetary Policy Statement saw the CPI rising 0.2% in the December quarter and 2.0% in the year to December.
Stats NZ says the average price of petrol fell 0.6% in the December quarter, from the September quarter, when petrol prices were up 5.5%.
It notes the quarterly hike in the prices was led by typical seasonal rises in international airfares, which were largely offset by seasonal falls in vegetable prices.
As for the annual rise of inflation, which was the same as the year to September, Stats NZ says housing and utilities were the main contributor to this.
Rents rose 2.4% across the country in the year, construction prices were up 3.6%, local authority rates were up 5.1%, dwelling insurance up 15% and electricity prices up 2.1%.
Higher transport costs were the second largest contributor to annual inflation. This was driven by petrol prices (which eased in the December quarter) rising 11%.
Taking petrol out of the equation, the CPI rose 1.5% in the year to December.
The inflation data release saw the New Zealand dollar rise from 67.2 US cents to 67.6 US cents.
Economists divided on OCR outlook
The figures haven't caused any banks economists to change their official cash rate (OCR) outlooks.
This said, ANZ economists continue to be much more downbeat on the economy than their counterparts at other major banks, sticking to their bold forecast that the OCR will be cut to 1.00% by next year.
Westpac senior economist Michael Gordon's take is: "Inflation is close to the 2% midpoint of the RBNZ’s target range; the recent plunge in fuel prices will drag the headline inflation rate down in early 2019, but the RBNZ will be able to look through this impact.
"We expect a gradual pick-up in domestic inflation pressures as the labour market tightens, but there is still some way to go before inflation tests the upper end of the target range.
"We expect the RBNZ to keep the OCR unchanged until late 2020."
ASB economist Kim Mundy says: "The details of the release were surprisingly strong, with non-tradable and measures of underlying inflation all lifting.
"Further, price pressure looks to be spreading through the economy with price increases evident in more sectors than the usual housing-related areas.
"From the RBNZ’s perspective, the result is stronger than expected and suggests that economic momentum over 2017 and early 2018 supported inflation pressures.
"However, given the recent slowdown in growth and the ongoing downside risks to the inflation outlook, we expect the RBNZ to remain patient for now.
"Although we don’t expect the RBNZ to raise the OCR for a considerable period of time, today’s release confirms that there is a high hurdle to rate cuts in the current environment."
Kiwibank economists Jarrod Kerr and Jeremy Couchman say: “Underlying, or core, inflation has continued to lift…
“Most of the risks we face are in the future.
“At a time when we forecast a meaningful lift in, fiscally stimulated, growth, the risks we face offshore are growing.
“The availability and price of credit (loans and mortgages) are also likely to be adversely impacted by the RBNZ’s assertive capital requirements on banks. But this will be a slow burn over the next five years.
“Our outlook is good, not great, and there are many risks.”
Finally, ANZ senior economist Liz Kendall says: “The RBNZ will take comfort from non-tradable inflation holding up, but will be vigilant that weakness in tradable inflation might flow through to inflation expectations...
“Looking forward, we may see some further uplift in domestic inflation in the short term, given that GDP growth was stronger than previously thought over the year to March 2018 and the economy (particularly the labour market) is clearly stretched.
“But it is becoming increasingly apparent that economic momentum is now fading, with forward-looking indicators pointing to further gradual petering out.
“Resource pressures look to be past their peak, meaning a durable lift in domestic inflation will be harder to achieve.
“Add global risks to the mix, and it paints a picture of medium-term inflation that in our view looks set to disappoint.”