New Zealand’s annual inflation figures have dropped to 4.7% in the 12 months to the December 2023 quarter.
It was down from 5.6% annual inflation in the September quarter, according to latest Stats NZ figures.
While the consumers price index (CPI) annual rise is the smallest in over two years, it still remains above the Reserve Bank of New Zealand’s target range of 1% to 3%.
Housing and household utilities, the largest contributor to the December 2023 quarter annual inflation rate, was mainly driven by higher prices for rent, construction, and rates.
Rent prices increased 4.5% in the 12 months to the December 2023 quarter, while construction and rates increased 3.6% and 9.8%, respectively.
The transport group which makes up 13.5% of the CPI basket fell 0.3% q/q. On a year-on-year basis, inflation for the transport group came in at 3.3% for the December quarter, with vehicle purchase prices increasing 3% in the same period.
ANZ says the q/q drop for transport was “much weaker” than the 0.7% increase it expected.
“The fall relative to forecast was attributed to falling vehicle prices,” the bank says.
“The recent moderation in petrol prices has not been fully reflected in the quarterly CPI, but the impacts are likely to be felt in Q1.
“International airfares rose in the quarter for the first time in a year, but prices still have scope to fall further.”
