New Zealand Q4 CPI rises 0.5% on quarter
NEW Zealand’s consumer inflation was in line with expectations in the fourth quarter and continues to track towards the central bank’s target range of 1 to 3 per cent.
Annual inflation was 4.7 per cent in the fourth quarter, slower than the 5.6 per cent in the third quarter, Statistics New Zealand said on Wednesday (Jan 24). It is now at its lowest level since the middle of 2021.
The consumer price index (CPI) rose 0.5 per cent quarter-on-quarter, slower than the 1.8 per cent rise in the third quarter. The data was in line with economists’ expectations in a Reuters poll.
The Reserve Bank of New Zealand raised its policy interest rate to 5.5 per cent in the middle of 2023 from a record low of 0.25 per cent in October 2021 to try to dampen inflationary pressures.
Rates have been on hold as the central bank waits for higher rates to work through the economy and pull inflation down. The central bank had forecast in November that fourth-quarter inflation would be 5.0 per cent and that the inflation rate would return to the target band by the second half of 2024.
The main drivers of the annual inflation were food, alcohol and tobacco and housing and household utilities, Statistics New Zealand said.
“Rent is 4.5 per cent more expensive than at the end of 2022. While the price increase in building a new house has fallen to 3.6 per cent, it is 41 per cent more expensive than pre-pandemic,” Nicola Growden, consumers prices senior manager, said.
Statistics New Zealand added that annual non-tradeable inflation was now at 5.9 per cent, down from 6.3 per cent. REUTERS
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