New Zealand Inflation Rate Lowest Since 1999


Consumer prices in New Zealand increased by 0.1 percent year-on-year in the fourth quarter of 2015, slowing from a 0.4 percent growth in the previous period and missing market expectations. It was the lowest level since the third quarter of 1999 mainly due to lower petrol prices.

Year-on-year, petrol prices (-8.1 percent) made the largest downward contribution for the year. Excluding petrol, the CPI showed a 0.5 percent increase. The small movement for the year was also influenced by both lower vehicle relicensing fees and international air fares.

Housing and household utility prices were up 2.8 percent in the year, with higher prices for housing rentals (+2.5 percent), newly built houses excluding land (+5 percent), and local authority rates (+6.2 percent). "Housing-related prices in Auckland increased by more than the national average, with new houses up 7.2 percent and rents up 3.3 percent from a year earlier," consumer prices manager Matt Haigh said.

Quarter-on-quarter, the CPI fell 0.5 percent. The CPI often falls in December quarters, due to seasonally lower vegetable prices and seasonal discounting, but this is the largest quarterly fall since December 2008. After adjusting for seasonal effects, the CPI fell 0.2 percent.

“Lower prices for petrol and vegetables were partly countered by higher prices for housing-related costs and airfares,” Mr Haigh said.

Petrol prices (-7 percent) made the largest downward contribution for the quarter. Excluding petrol, the CPI showed a 0.2 percent fall. The average price of a litre of 91 octane petrol in the December 2015 quarter was $1.84, compared with $1.98 in the September quarter. By the end of the December quarter, petrol pump prices were 4.5 percent below the average price for the quarter.

Vegetable prices showed a seasonal fall (-17 percent) in the December 2015 quarter. After adjusting for seasonal effects, vegetable prices were unchanged. Fresh milk prices fell 6.5 percent, and were at their lowest level since the December 2009 quarter.

Prices for tradable goods and services fell 1.8 percent, with the stronger New Zealand dollar lowering prices for petrol and overseas package holidays. Non-tradable goods and services showed a 0.5 percent rise, a range of housing-related price rises, and higher domestic air fares.

New Zealand Inflation Rate Lowest Since 1999


Statistics New Zealand | Joana Ferreira | joana.ferreira@tradingeconomics.com
1/19/2016 10:03:24 PM