Annual Inflation At 2.2 Percent

New Zealand's consumers price index increased 2.2 percent in the September 2024 quarter, compared with the September 2023 quarter, according to figures released by Stats NZ today.

The 2.2 percent annual increase follows a 3.3 percent annual increase in the June 2024 quarter.

"For the first time since March 2021, annual inflation is within the Reserve Bank of New Zealand's target band of 1 to 3 percent. Prices are still rising, but not as much as previously recorded," consumer prices manager Nicola Growden said.

Higher rent prices was the biggest contributor to the annual inflation rate, up 4.5 percent. Almost a fifth of the 2.2 percent annual increase in the CPI was due to rent prices.

Of the five broad regions we measure, rent prices in the South Island excluding Canterbury had the biggest annual increase, up 6.6 percent. Wellington had the smallest annual increase, up 2.0 percent.

Prices for local authority rates and payments increased 12.2 percent in the 12 months to the September 2024 quarter (16 percent contribution to the 2.2 percent increase).

"Across all regions, there were a range of local authority rates increases - some higher than the 12 percent, some lower," Growden said.

Cigarettes and tobacco prices also increased, up 10.0 percent in the 12 months to the September 2024 quarter (14 percent contribution to the 2.2 percent increase). This increase was mainly due to the annual tobacco excise tax increase on 1 January 2024.

Lower petrol prices, which fell 8.0 percent, helped to offset rising prices.

Also partly offsetting the annual CPI increase was lower prices for vegetables, falling 17.9 percent. This decrease follows high prices for potatoes, kūmara, and onions last year.

Quarterly inflation at 0.6 percent

The consumers price index rose 0.6 percent in the September 2024 quarter, compared with the June 2024 quarter.

Prices for local authority rates and payments increased 12.2 percent, contributing over half of the 0.6 percent quarterly CPI rise. Rates are captured once a year in the September quarter, as this is when ratepayers see price changes set by councils. This movement follows a 9.8 percent increase last year.

"This is the largest rates increase since 1990," Growden said.

The 8.4 percent increase in vegetable prices was primarily driven by rising prices for tomatoes (16 percent contribution to the 0.6 percent increase).

Prescription charges were reintroduced on 1 July 2024. Pharmaceutical product prices, which includes prescription charges, increased 17.0 percent over the quarter (15 percent contribution to the 0.6 percent increase).

While prices rose overall, a 6.5 percent fall in petrol prices across the country was the largest downwards contributor to the 0.6 percent quarterly movement. This quarter included the removal of the Auckland regional fuel tax of 10 cents per litre plus GST on 30 June 2024.

Early childhood education was also a partly offsetting factor, falling by 22.8 percent, due to the introduction of the FamilyBoost rebate.

"Many families are seeing increased weekly fees, however the FamilyBoost rebates have lowered the total cost of early childhood education," Growden said.