The Asian Development Bank says the Cook Islands' inflation rate accelerated to three percent in the 2015 financial year.
Its Economic Outlook 2016 report says the increase was because of higher alcohol and tobacco taxes, and a weaker New Zealand dollar.
A local economist, Vaine Wichman, says the country's inflation rate usually hovers at or above that of New Zealand.
The bank's report projects that inflation will fall to 1.8 percent this financial year, and rise to two percent in 2017 as import prices rise.
An advisor at the finance ministry, James Webb, told the Cook Islands News that the use of the New Zealand dollar means the country has relatively low inflation, making it less volatile than other Polynesian countries.