New Zealand Inflation Rate Highest Since 2014

Consumer prices in New Zealand jumped 1.3 percent year-on-year in the fourth quarter of 2016, compared to an upwardly revised 0.4 percent rise in the previous period and above market expectations of 1.2 percent. It was the highest level since the third quarter of 2014 mainly due to higher prices of newly built houses, excluding land and rentals for housing.

Housing-related prices continued to be the main upward contributor, influenced by purchase of newly built houses, excluding land (up 6.5 percent, the largest increase since Q3 of 2005); with Auckland up 8.2 percent; rentals for housing (up 2.0 percent, the lowest since Q1 of 2014); with Auckland up 3.2 percent, and Canterbury down 0.8 percent; real estate services (up 12 percent); local authority rates (up 3.2 percent); electricity (up 2.3 percent) and property maintenance services (up 3.4 percent).

The annual increases for housing-related prices were partly offset by lower transport group prices, influenced by other private transport services (down 13 percent), caused by lower vehicle relicensing fees; international air transport (down 5.7 percent). In addition, fruit also declined (down 6.3 percent in the year to December 2016).

Tradables decreased 0.1 percent in the year to December 2016. Lower prices for international air fares, fruit, and package holidays made the main downward contributions. The NZ dollar remains at a historically high level against the trade weighted index.

Non-tradables increased 2.4 percent in the latest year. Prices for the purchase of new housing, excluding land, made the most significant upwards contribution, followed by cigarettes and tobacco, and housing rentals. The increases were partly offset by decreases for other private transport services.  

On a quarterly basis, consumer prices also rose 0.4 percent, from an upwardly revised 0.3 percent gain in the previous quarter. 

New Zealand Inflation Rate Highest Since 2014

Statistics New Zealand | Deborah Neves |
1/25/2017 10:31:23 PM