But prices, especially food, still rising at highest levels in 30 years
Stats NZ has released the latest annual inflation data, revealing the consumers price index rose 6% in the 12 months to June 2023, a fall 0f 0.7% compared to the year to March figures.
In the 12 months to March 2023, inflation increased 6.7%.
“Prices are still increasing at rates not seen since the 1990s but are rising at a lower rate than the last few quarters,” Stats NZ consumers prices senior manager Nicola Growden (pictured above) said, responding to the release of June CPI data on July 19.
The national statistics agency said food was the largest contributor to the June 2023 annual inflation rate. This was due to rising prices for vegetables, ready-to-eat food, and milk, cheese, and eggs.
Vegetable prices lifted 23.3% in the 12 months to June 2023, while prices for ready-to-eat food increased 9.8%, and milk, cheese, and eggs rose 13.8%.
“With food prices up 12.3% annually, consumers may be buying cheaper alternatives to keep their food bill lower,” Growden said.
Housing costs on the rise
The next largest contributor to inflation was housing and household utilities, driven by rising prices for both construction and rents.
Prices for building a new house increased 7.8% in the 12 months to June 2023, following an 11.5% rise in the 12 months to March 2023.
“The price of building a new home has increased by more than a third in the three years from the June 2020 quarter,” Growden said.
Rents rose 4.2%, down slightly on the 4.3% rise in the year to March 2023.
Recreation and culture prices
Stats NZ said recreation and culture was the next largest contributor to CPI, with the main factors being higher prices for pets and pet-related products, such as pet food, and overseas accommodation.
Growden said slightly offsetting these increases was a decrease in prices in the transport sector. Petrol prices dropped 15% for the year to June 2023, compared to an 8.3% drop to March 2023.
Quarterly inflation at 1.1%
Looking at the quarterly figures, Stats NZ reported the CPI rose 1.1% in the June 2023 quarter, influenced by higher prices for food, and housing and household utilities. The higher prices were partly offset by lower prices for transport.
Ready-to-eat food and vegetables were the two largest contributors when it came to food, up 3.1% and 4% respectively.
The next largest contributor to quarterly CPI was housing and household utilities, featuring higher prices for rents and construction. Prices for rent and construction both rose 1.1% in the June quarter.
Offsetting these increases was a fall in transport, driven by lower prices for international airfares, down 11.9%, and petrol which dropped by 1.5%.
The impact of removing half-price public transport fares, the 25c-a-litre cut in fuel excise duty, and lower road user charges on July 1 would be seen in the September 2023 quarter figures.
Tradeable and non-tradeable inflation
Stats NZ said non-tradeable inflation was 6.6% in the 12 months to June 2023, affected by higher prices for construction, rents, and ready-to-eat food.
Non-tradeable inflation measures final goods and services that do not face foreign competition and is an indicator of domestic demand and supply conditions. However, the inputs of these goods and services can be influenced by foreign competition.
Tradeable inflation was 5.2% in the 12 months to June 2023, driven by higher prices for vegetables and international air transport while being partly offset by falling petrol prices. Tradeable inflation measures final goods and services that are influenced by foreign markets.
