Annual Inflation At 3.3 Percent

New Zealand's consumers price index increased 3.3 percent in the 12 months to the June 2024 quarter, according to figures released by Stats NZ today.

The 3.3 percent increase follows a 4.0 percent increase in the 12 months to the March 2024 quarter.

"The 3.3 percent annual price increase is below what was seen during the peak in 2022, and is similar to 3 years ago," consumers prices senior manager Nicola Growden said.

The Reserve Bank of New Zealand's target range for consumer inflation is between 1 and 3 percent.

Housing and household utilities was the largest contributor to the annual inflation rate. This was due to rising prices for rent, construction of new houses, and rates.

Rent prices increased 4.8 percent in the 12 months to the June 2024 quarter, while construction of new houses and rates increased 3.0 percent and 9.6 percent, respectively.

The next largest contributor to the annual increase was miscellaneous goods and services, due to rising prices for insurance.

Prices for insurance increased 14 percent in the 12 months to the June 2024 quarter, following a 14 percent increase in the 12 months to the March 2024 quarter.

"Insurance prices increased 14 percent annually to June 2024 - nearly double what we saw 15 years ago in June 2009, which was the previous highest peak in the series," Growden said.

"Increases in dwelling and vehicle insurance premiums largely drove the higher insurance prices."

Alcoholic beverages and tobacco was the next largest contributor, driven by rising prices for cigarettes and tobacco, and beer.

Quarterly inflation at 0.4 percent

The consumers price index rose 0.4 percent in the June 2024 quarter, due to rising prices for housing and household utilities, partly offset by lower recreation and culture prices.

Housing and household utilities was the largest contributor to the quarterly inflation rate. This was due to rising prices for rent, increasing 1.2 percent, construction of new houses, increasing 0.9 percent, and household energy (which includes electricity and gas), increasing 2.8 percent.

"Electricity prices tend to increase in June quarters as the nights get longer," Growden said.

"The 3.0 percent increase in electricity prices this quarter is the largest quarterly rise in 10 years, but is similar to the June 2023 quarter."

The largest downwards contributor to the 0.4 percent quarterly movement was recreation and culture. The fall was driven by a 4.5 percent decrease for accommodation services and a 3.4 percent decrease for other recreational equipment and supplies prices, such as video games and pet related products.

Tradeable and non-tradeable inflation

Non-tradeable inflation was 5.4 percent in the 12 months to the June 2024 quarter (compared with 5.8 percent in the 12 months to the March 2024 quarter), driven by rent, insurance, and cigarettes and tobacco.

Non-tradeable inflation measures final goods and services that do not face foreign competition and is an indicator of domestic demand and supply conditions. However, the inputs of these goods and services can be influenced by foreign competition.

Tradeable inflation was 0.3 percent in the 12 months to the June 2024 quarter (compared with 1.6 percent in the 12 months to the March 2024 quarter), driven by higher prices for petrol, accommodation services, and grocery food. This was partly offset by lower prices for fruit and vegetables, and passenger transport services.

Tradeable inflation measures final goods and services that are influenced by foreign markets.