November 14th, 2024
New Zealand's inflation rate has remained at levels unseen since the 1990s, with the consumers price index increasing by 6.7% in the 12 months to March 2023, according to figures released by Stats NZ on Thursday. This follows a 7.2% increase in the 12 months to December 2022.
Food was the largest contributor to the annual inflation rate, driven by a 22% increase in vegetable prices, a 9.7% increase in ready-to-eat food, and a 15% increase in milk, cheese, and eggs. Housing and household utilities were the next largest contributors, with new house construction costs rising 11% in the 12 months to March 2023, following a 14% increase in the 12 months to December 2022. Rents increased by 4.3% in the same period.
Nicola Growden, consumer prices senior manager at Stats NZ, noted that higher costs of materials and labour continued to drive the increase in building new homes. Recreation and culture also contributed to the inflation rate, driven by rising prices for domestic accommodation services and pets and pet-related products.
Slightly offsetting these increases was an 8.3% decrease in petrol prices in the 12 months to March 2023, following a 2.4% increase in the 12 months to December 2022.
New Zealand's inflation rate remains higher than some international counterparts, such as the United States (5.0%) and Canada (4.3%). However, it is lower than the United Kingdom (10.4%) and the Organisation for Economic Co-operation and Development (OECD) average (8.8%).
For the March 2023 quarter, the consumers price index rose by 1.2%, influenced by rising prices in food, alcoholic beverages and tobacco, and housing and household utilities groups. The annual tobacco tax increase on 1 January 2023 lifted cigarette and tobacco prices by 7.6% in the March 2023 quarter, according to the Stats NZ media release.
Growden revealed that the average price of a pack of 25 cigarettes was $48.71 in March 2023, with one cigarette now costing about $1.95, compared to 83 cents each 10 years ago.
Non-tradeable inflation reached 6.8% in the 12 months to March 2023, the highest since the series began in June 1999, driven by higher prices for construction, rents, and ready-to-eat food. Meanwhile, tradeable inflation was at 6.4%, driven by higher prices for international air transport.
