This boosted by higher rents and interest payments and increased food prices
The cost of living for New Zealand households increased by 7.7% in the 12 months to March 2023, according to fresh Stats NZ figures.
The key drivers for the increase in household costs were the 38% spike in mortgage costs and a 12% surge in food costs, with the food increases including higher grocery food, fruit, and vegetable prices, Stats NZ’s latest household living-costs price indexes (HLPIs) showed.
The 7.7% lift in living costs indexes was considerably higher compared to the 6.7% Consumers Price Index (CPI) inflation for the March year, interest.co.nz reported.
In terms of quarterly increases, the 1.8% increase in HLPIs was also higher than the quarterly CPI increase of 1.2%.
HLPIs and the CPI are different mainly in that the CPI covers the cost of building a new house (which climbed 11% in the year to March), while the HLPIs instead includes mortgage interest payments – which as stated rose by 38%.
The 38% figure is actually somewhat lower compared to the figure for the year to December 2022, when the increase totalled 45% while overall living costs rose 8.2%.
Another point of difference is that whereas the household living-costs price indexes measure how inflation affects 13 different household groups, plus an all-households group, the CPI measures how inflation affects New Zealand as a whole.
Stats NZ said the two measures of inflation are typically used for different purposes: the CPI mainly for monetary policy (through RBNZ and its use of the OCR to help tame inflation), and the HLPIs for providing insight into the cost of living for different household groups.
James Mitchell, Stats NZ's consumer prices manager, said the average household saw food prices increase by 12%, “which was the main contributor for most household groups.”
During the 12 months to March, the other groups covered by the indexes also saw increases, with all households up 7.7%, beneficiary by 6.7%, Māori by 7.5%, superannuitant by 7.1%, highest-spending households by 8.7%, and lowest-spending households 6.9%, interest.co.nz reported.
Use the comment section below to tell us how you felt about this.
