INFLATION rose to 6.4 per cent in April from 5.6 per cent in March, led by increases in food and energy prices, the Reserve Bank announced in its May economic review report.
The bank said the increase in energy prices was owed to food shortages following the April floods.
Despite the rise in downside risks, growth in our major trading partner economies is currently expected to remain positive this year, the bank said in its review report.
In the domestic economy, growth for 2012 was recently revised upwards by the Macroeconomic Policy Committee to 2.7 per cent from 2.3 per cent, the report said.
This was largely owed to improved prospects for government-related sectors such as communication, construction,wholesale and retail fishing.
Other related sectors were:
* social and personal service activities,
* forestry,
* mining and quarrying,
* manufacturing,
* electricity and water sector, which more than offset the damage suffered from the recent flood.
The outlook for 2013 was also revised upwards, to 2.9 per cent and is expected to be broad based, the bank said.
Electricity consumption a broad measure of underlying economic activity rose marginally on an annual basis by 0.2 percent in the first three months of the year, led by higher industrial consumption, the bank said.
Production in the mining sector was robust in the March quarter with gold output rising by 26.4 per cent from the same period last year the bank said.
Visitor arrivals continued its favourable performance after its record year in 2011 with tourist numbers rising over the year by 1.6 per cent cumulative to February, the bank said.