The consumer price index (CPI) in New Zealand has increased by 3.3 per cent in the 12 months to the June 2024 quarter, new figures from Stats NZ reveal.
This is down from a 4 per cent increase in the 12 months to the March quarter, and down from the peak of 7.3 in the September 2022 quarter.
Amid the slowing of inflation, the clothing and footwear category is at a low 1.4 per cent in the June quarter this year compared to last year, with that percentage down from 4.3 per cent recorded in the 12 months to the March quarter.
Quarter-on-quarter, fashion sales are down 0.2 per cent, and have been below the 1 per cent mark since June last year which was then at 3 per cent.
Stats NZ consumers prices senior manager Nicola Growden said the 3.3 per cent annual price increase is below what was seen during the peak in 2022 and is similar to three years ago.
It is also nearing the Reserve Bank of New Zealand’s target range for consumer inflation is between 1 and 3 per cent.
The housing and household utilities category 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 per cent in the 12 months to the June 2024 quarter, while construction of new houses and rates increased 3.0 per cent and 9.6 per cent 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 per cent in the 12 months to the June 2024 quarter, following a 14 per cent increase in the 12 months to the March 2024 quarter.
“Insurance prices increased 14 per cent 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, tobacco, and beer.
Quarter on quarter, CPI rose 0.4 per cent 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 per cent, construction of new houses, increasing 0.9 per cent, and household energy (which includes electricity and gas), increasing 2.8 per cent.
“Electricity prices tend to increase in June quarters as the nights get longer,” Growden said.
“The 3.0 per cent increase in electricity prices this quarter is the largest quarterly rise in 10 years, but is similar to the June 2023 quarter.”
The largest downward contributor to the 0.4 per cent quarterly movement was recreation and culture. The fall was driven by a 4.5 per cent decrease for accommodation services and a 3.4 per cent decrease for other recreational equipment and supplies prices, such as video games and pet-related products.
Retail NZ CEO Carolyn Young said retailers are relieved to see that inflation is slowing.
“This is definitely heading in the right direction, albeit with housing and household utilities remaining at higher levels,” Young said.
“We are getting nearer to the Reserve Bank’s target range for consumer inflation of 1-3 per cent, bringing the prospect of interest rate cuts closer. We hope this will translate into a turnaround in consumer confidence and a greater willingness to support local retail businesses.”