Inflation is forecast to have risen 0.5% in the three months to June, taking the annual inflation rate to the same figure, still well below the Reserve Bank's target of between 1% and 2%.
Statistics New Zealand will this morning release the Consumers Price Index, the official measure of inflation.
ANZ senior economist Philip Borkin said if annual inflation did reach 0.5% in June, it would be the highest in 18 months, although still the seventh consecutive quarter below 1%.
"Headline inflation is clearly low and looks set to remain below the Reserve Bank's target mid-point [2%] for some time yet given the dampening influence of the New Zealand dollar.
"However, we suspect the second-quarter CPI figures will show mounting evidence domestic inflation pressures are lifting off lows.''
That would be consistent with the economy's "solid'' performance and ongoing absorption of spare capacity, he said.
Where capacity pressures were most intense, such as in construction, price tension would be clear.
Westpac senior economist Michael Gordon said a rebound in fuel prices and ongoing gains in the housing-related categories were expected to account for most of the quarterly increase.
Elsewhere, the picture looked similar to recent quarters with a muted pass-through from last year's fall in the dollar and no real sign of home-grown inflation pressures emerging outside of housing.
"With world oil prices having bounced back from their early-year plunge, the risk of New Zealand slipping into outright inflation seems to have passed.''
But the return to the midpoint of the Reserve Bank's inflation target was likely to remain a gradual process, he said.
At a glance
• Inflation set to rise to 0.5%
• Rebound in fuel prices and house prices lead rise
• Stronger dollar still playing a role in economy
