First-quarter inflation of 0.5% has come in marginally higher than expected, while the 1.1% annual rate is largely in line with expectations.
The soft inflation data left economists unmoved on expectations the Reserve Bank will change the interest-driving official cash rate (OCR) any time soon.
The annual inflation rate, measured by the consumer price index, declined from 1.6% for the year ended December to 1.1%, while the first-quarter inflation was 0.5%.
Statistics New Zealand prices senior manager Paul Pascoe said government-influenced price changes had affected the annual figure. The 10% rise in tobacco and cigarette taxes had been countered by the Government's one year's free tertiary education policy.
Mr Pascoe said the 10% tobacco tax increase had lifted the quarterly inflation.
"Higher prices for accommodation services and petrol also contributed to the consumer price index rise, but they were slightly offset by seasonal falls for international air fares," Mr Pascoe said in a statement.
Westpac senior economist Michael Gordon said the annual increase was in line with the bank's, market's and Reserve Bank's expectations, albeit with variances in quarterly change forecasts.
"The dip in annual inflation is likely to be a temporary one," he said.
The lower New Zealand dollar during the past year would eventually give a boost to tradeable, imported goods prices, and the comparison with prices a year ago would favour a higher inflation rate over the next few quarters.
"That said, we don't expect inflation to make it into the upper half of the [Reserve Bank's] 1%-3% target range any time soon," he said.
Housing-related prices were relatively subdued for the quarter. Rents were up by 0.6%, while a further slowdown in Auckland's market was offset by a pickup in other parts of the country.
ASB economist Kim Mundy did not expect the Reserve Bank to change course over its OCR outlook because of the quarterly inflation data.
"The Reserve Bank will remain comfortable leaving monetary policy on hold for now," Ms Mundy said.
She said tradeable, domestic goods inflation remained the key drag on headline inflation. Quarterly tradeable inflation was negative for the second consecutive quarter.
At the same time, non-tradeable imported goods inflation was not lifting fast enough to offset the tradeable drag.
