(Adds detail from Statistics New Zealand, market reaction)
New Zealand's consumer price index rose 0.4 percent in the second quarter, bolstered by higher gasoline prices and construction costs, Statistics New Zealand said on Monday.
"Higher petrol and housing-related prices were countered by lower prices for meat and domestic air fares," consumer prices manager Matt Haigh said.
The New Zealand dollar fell on the news and was trading at US$0.7090 as the increase was slightly below the 0.5 percent rise expected by economists.
Annual inflation remained stable at 0.4 percent in the year to June quarter, also slightly below the 0.5 percent expected by economists.
Housing-related prices continue to be the main upward contributor, Statistics New Zealand said.
The data "reinforces (the belief) that inflation is going to be a fairly gradual climb back up and the Reserve Bank is underestimating how long that will take to happen," said ASB Chief Economist Nick Tuffley.
New Zealand's central bank is mandated with keeping inflation in a 1 percent to 3 percent target range.
Tuffley said that ASB was still expecting low inflation to spur the central bank to cut rates to 2.00 percent on August 11 from the current 2.25 percent but noted "there are still a lot of question marks in the air."
He said the market will be watching to see whether the central bank's economic update, scheduled for Thursday morning, sheds any light on what its next move is likely to to be.
.
