New Zealand Finance Minister Nicola Willis cautioned on Monday that inflation could climb “much higher” this year and remain outside the central bank’s 1%–3% target if Middle East tensions persist. Treasury modelling suggests a sharper peak under a scenario of prolonged conflict and deeper supply chain disruption. Inflation already stood at 3.1% in Q4, above the ceiling, with rising energy costs fueling market bets on near-term policy tightening. Willis declined to give precise forecasts, noting Treasury has yet to finalize its central scenario.