Inflation has slowed to a three-year low, with the consumer price index falling back into the Reserve Bank of New Zealand’s target band.
Stats NZ said the CPI rose 0.6% in the three months ended September, taking the annual rate to 2.2% from 3.3% – the lowest since March 2021.
The biggest contributors to the quarterly result were higher rates, food and medical costs, which offset cheaper fuel and early childhood costs.
“Prices are still rising, but not as previously recorded,” Stats NZ senior manager of prices Nicola Growden said today.
Government policy changes affected several price moves.
The reimposition of prescription charges was a driver in the 10.1% rise of medical products and services.
However, the scrapping of the Auckland regional fuel tax contributed to lower transport costs, and the Family Boost Scheme subsidy for pre-school childcare lowered education costs.
Official taxes on tobacco and alcohol increased prices by 10%.
Stubborn domestic inflation
Domestic prices – known as non-tradables – remained the backbone of inflation, notably rates and rents.
Non-tradables rose 1.3% for the quarter, and 4.9% for the year.
Local authority rates rose 12.2%, accounting for more than half the quarterly inflation rate.
“This is the largest rates increase since 1990,” Growden said.
Rents were up 4.5% for the year, and insurance cost 12.9% higher.
By comparison, the price of imported goods and services – tradables – fell 0.2% for the quarter and by 1.6% for the year.
The inflation numbers were close to the Reserve Bank’s August forecasts, and supported the prospect of another large official cash rate cut in November.
