New Zealand might not be entirely out of the woods with high inflation.  

The Consumers Price Index rose 4.7% in the year to December, a two year low.  

The New Zealand Institute of Economic Research says inflation is still above the 1-3% Reserve Bank target.  

Principal Economist Christina Leung told Roman Travers that while she expects the figure to get under the target this year, some factors are putting that at risk.  

She says things like the Red Sea attacks are driving up shipping costs. 

LISTEN ABOVE 

• Reduced inflation doesn't mean safety from hikes just yet, economist warns
• Inflation falls to 4.7 per cent in December quarter