New Zealand’s consumer price index (CPI) based inflation saw a 4 percent increase in the 12 months leading up to the March 2024 quarter, marking the smallest rise since June 2021, as revealed by the statistics department Stats NZ on Wednesday.
This 4 percent increase in inflation follows a 4.7 percent uptick in the 12 months to the December 2023 quarter, according to Stats NZ.
While the recent quarterly price hikes are the most moderate since June 2021, they still surpass the Reserve Bank of New Zealand’s target range of 1 to 3 percent, noted Nicola Growden, Stats NZ’s senior manager for consumer prices.
The primary driver behind the annual inflation rate was housing and household utilities, with rent, construction of new houses, and rates playing significant roles in pushing prices upwards, Growden explained.
Over the 12 months leading to the March 2024 quarter, rent prices surged by 4.7 percent, while construction of new houses and rates increased by 3.3 percent and 9.8 percent, respectively, according to Growden.
“Rent prices are increasing at the highest rate since the series was introduced in September 1999,” Growden emphasized.
The second-largest contributor to the annual increase was recreation and culture, buoyed by rising prices for international accommodation and cultural services such as subscription TV, cinema tickets, and zoo admission, Growden added.
Notably, prices for international accommodation soared by 20.8 percent in the 12 months leading to the March 2024 quarter, following a 6 percent increase in the previous year.
Alcoholic beverages and tobacco constituted the next significant contributor, driven by escalating prices for cigarettes and tobacco, as well as beer, according to Growden’s analysis.
In the March 2024 quarter alone, the consumer price index experienced a 0.6 percent rise, attributed to increased prices for alcoholic beverages and tobacco, as well as recreation and culture. However, this uptick was partially offset by lower transport prices, according to statistics provided by Stats NZ.
The decline in transport prices was predominantly influenced by a 10.3 percent decrease in international airfares and a 2.3 percent drop in petrol prices, Stats NZ reported.
As New Zealand navigates through shifting economic landscapes, the implications of these inflationary trends will undoubtedly shape policy discussions and consumer behavior in the months ahead.
