New Zealand predicts 3.7% inflation if the Iran war continues through the year

New Zealand's Finance Minister Nicola Willis stated on Monday that the country's treasury forecasted an inflation rate of 3.7% if a war with Iran continues through this year.

New Zealand's inflation rate rose by 3.1% over the past 12 months, exceeding the target rate set by the central bank and forecasts.

Willis stated that Treasury modelling for a worst-case scenario with a long conflict in Iran, and oil prices reaching $135 per barrel predicted inflation of 3.7%.

She told reporters that she was "looking forward" to the fact that generalised prices may be higher than expected this year. This is something that New Zealanders can live with. Oil prices continued to rise on Monday, as the U.S. and Israeli?war against Iran entered its?third week. This puts oil infrastructure at risk while keeping the Strait of Hormuz closed in the largest disruption of global supplies ever.

Willis said that the government would consider "a timely and targeted" response, if fuel prices continue to rise and raise living costs for households.

"Clearly, there's been an impact on the price." "Petrol prices are up... we're acutely aware of the impact that this will have on many New Zealanders."

Willis added that New Zealand currently has 57 days' worth of petrol, 49 of diesel and 47 of jet fuel in reserve.

She said that "current orders are secure" and that there were normal stock levels in the country as well as on the water.

Channel Infrastructure, the company that operates New Zealand's largest fuel import terminal, also informed us that fuel ships were still departing and arriving at their scheduled times. Reporting by Christine Chen, Sydney; Editing and proofreading by Tom Hogue and Lincoln Feast.

(source: Reuters)