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Annual inflation falls to 4%, lowest in years

The annual rate of inflation has continued to fall with Stats NZ figures showing a 4% rise in the Consumer Price Index (CPI) in 12 months to the March quarter.

The CPI is an annual measure that reflects changes in the price of goods and services.

The 4% increase today follows a 4.7% increase in the 12 months to the December 2023 quarter. Inflation has fallen from a 7.3% peak in June 2022.

Stats NZ consumers prices senior manager Nicola Growden said the price increases this quarter have been the smallest since June 2021.

However, they remain above the Reserve Bank’s target range of 1% to 3% and slightly above the figure expected by the central bank earlier this year.

In February, it forecasted annual inflation would drop to 3.8% in the March quarter

According to Stats NZ, rising prices for housing and household utilities were the largest contributors to the inflation rate.

“This was due to rising prices for rent, construction of new houses, and rates.”

The price of rent increased 4.7% in the 12 months to the March 2024 quarter, while construction of new houses and rates increased 3.3% and 9.8%, respectively.

“Rent prices are increasing at the highest rate since the series was introduced in September 1999,” Growden said.

The next largest contributor to the annual increase was recreation and culture, due to rising prices for international accommodation and cultural services – which includes items like subscription TV, cinema tickets, and zoo admission.

Prices for international accommodation increased 20.8% in the 12 months to the March 2024 quarter, following a 6.0% increase in the 12 months to the December 2023 quarter.

Acting Finance Minister Chris Bishop said the inflation news was “encouraging news for Kiwis, but there is more work to be done”.

“Low and stable inflation is important for New Zealand’s long-term success, and for Kiwis’ back pockets,” he said.

“We need to see inflation at the Reserve Bank’s target range of 1-to-3% so that interest rates can follow, giving New Zealanders cost of living relief and allowing the economy to start growing strongly again.”



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