Annual inflation rate eases to 5.6 per cent

Photo: RNZ.

There is little relief for New Zealanders struggling to make ends meet, with high petrol prices continuing to lift inflation.

However, consumer prices rose a less than expected 1.8 per cent in the three months ended in September.

The annual inflation rate eased to 5.6 per cent, a two year low.

The figures are below expectations, including the Reserve Bank's August forecast.

A surge in petrol prices and the end of reduced fuel taxes contributed to the rise in the consumers price index, says Stats NZ prices senior manager, Nicola Growden.

"Petrol prices increased 41 cents in the September quarter and what we saw at the start of that quarter, in July, is that 25 cents per litre tax relief came back on, so that caused a really big part of that 41 cent increase.

"Because of that we had transport ... as one of the main drivers for our quarterly increase in inflation."

Food helped drive increased inflation in the quarter and annually, says Nicola.

"A lot of what we're seeing in there is staple items, that people go to the supermarket to buy ... bread, cereals, eggs, milk.

"But we're also seeing an increase in restaurant meals and ready to eat food. So if someone's going out for a brunch or a lunch meal or a dinner, we have seen increases in those prices as well."

While fruit and vegetable prices continued to rise, seasonably adjusted figures showed a drop in prices, she says.

"For the quarter, we did still see an increase in fruit and vegetable prices - that was tomatoes, grapes, capsicums that were coming through there.

"We do also notice at this time of the year some of those seasonal items - the broccolis, the leafy greens, lettuces - they do start to drop off in price.

"So, if we take that into account, our seasonally adjusted figures have shown a fall for fruit and vegetables."

Major banks predicted a 1.9 to 2.2 per cent increase in consumer prices for the quarter, so the 1.8 per cent rise is lower than expected, says Nicola.

"We don't really know what's going to happen going forward, however we have seen in our distribution of prices, there are more prices that are starting to fall.

"In previous quarters, we had quite a high proportion of prices increasing or staying flat, but now that is starting to show a little bit of a drop-off and more prices are starting to fall."

The costs of running a house and rates also increased.

The Reserve Bank does not expect inflation back in its target band until late next year, which will keep the Official Cash Rate at high levels for an extended period.

In the previous update, covering the three months ended June, the annual inflation rate fell to 6 per cent from 6.7 per cent the previous quarter.

-RNZ.

2 comments

So 5.8% is good ?

Posted on 18-10-2023 09:44 | By an_alias

Come on its been running higher than this and lets face it you are only comparing the % over a short period.
How about show us compared to 3 or 6 years ago before the last govt hit job.
It won't be dropping any time soon with there destruction of the oil industry.


an_alias...

Posted on 19-10-2023 14:36 | By This Guy

destruction of the oil industry? First Quarter 2023 Net Income: ExxonMobil - $11,430,000,000, Chevron - $6,540,000,000, Shell - $9,646,000,000, BP - $8,218,000,000 - the fossil fuel industry is still raking in massive profits - the only people hurting here are regular folks (as usual) and the planet (looking forward to another "hottest year on record again")


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