WELLINGTON, March 24 (Xinhua) -- The Reserve Bank of New Zealand (RBNZ) expects higher short-term inflation and weaker growth as the Middle East conflict disrupts global energy supplies, RBNZ Governor Anna Breman said Tuesday.
In a speech on the impact of the conflict on New Zealand, Breman acknowledged the uncertainty and hardship that many households and firms are experiencing at this difficult time.
"We are likely to see higher headline inflation over the near term, and somewhat weaker growth momentum," she said.
"There is a risk that global financial stability risks could emerge and affect the cost and availability of funding for New Zealand banks," the governor of the central bank said, noting that recent stress testing, however, suggests that banks are resilient with strong capital and liquidity buffers and are "well-placed to weather severe geopolitical shocks."
"The best contribution that monetary policy can make to the wellbeing of New Zealanders is to deliver low and stable inflation over the medium term," she added.
New Zealand's annual inflation rate increased 3.1 percent in the 12 months to the December 2025 quarter, above the RBNZ's 1-3 percent target range, statistics showed.
Meanwhile, Finance Minister Nicola Willis announced Tuesday that almost 150,000 families will get an extra 50 NZ dollars (about 29 U.S. dollars) a week for up to a year to offset soaring fuel costs over the Middle East conflict. ■
