NZ CPI posts smallest rise since 1999

Downtown Shopping CentreThe Consumers Price Index (CPI) increased just 0.1 per cent in the year to the December 2015 quarter, following a 0.4 per cent increase in the year to the September 2015 quarter, Statistics New Zealand says.

The previous smallest annual NZ CPI movement was a 0.5 per cent fall in the year to the September 1999 quarter.

The CPI fell 0.5 per cent in the December 2015 quarter. But Statistics NZ consumer prices manager Matt Haigh says the CPI often falls in December quarters, due to seasonally lower vegetable prices and seasonal discounting. Nevertheless, this is the largest quarterly fall since December 2008. After adjusting for seasonal effects, the CPI fell 0.2 per cent.

“Lower prices for petrol and vegetables were partly countered by higher prices for housing-related costs and airfares,” said Haigh.

Petrol prices (down 7 per cent) made the largest downward contribution for the quarter. Excluding petrol, the CPI showed a 0.2 per cent fall. The average price of a litre of 91 octane petrol in the December 2015 quarter was $1.84, compared with $1.98 in the September quarter. By the end of the December quarter, petrol pump prices were 4.5 per cent below the average price for the quarter.

Vegetable prices showed a seasonal fall (down 17 per cent) in the December 2015 quarter, but after adjusting for seasonal effects, were unchanged. Fresh milk prices fell 6.5 per cent, and were at their lowest level since the December 2009 quarter.

Prices for tradable goods and services fell 1.8 per cent, with the stronger New Zealand dollar lowering prices for petrol and overseas package holidays. Non-tradable goods and services showed a 0.5 per cent rise, a range of housing-related price rises, and higher domestic air fares.

Annual figures

On an annual basis, falling petrol prices (down 8.1 per cent) made the largest contribution to the falling cost of living. Excluding petrol, the CPI showed a 0.5 per cent increase in the year to the December quarter. The small movement for the year was also influenced by both lower vehicle relicensing fees and international air fares, said SNZ.

Housing and household utility prices were up 2.8 per cent in the year, with higher prices for housing rentals (up 2.5 per cent), newly built houses excluding land (up 5 per cent), and local authority rates (up 6.2 per cent).

“Housing-related prices in Auckland increased by more than the national average, with new houses up 7.2 per cent and rents up 3.3 per cent from a year earlier,” said Haigh.

The CPI measures the rate of price change of goods and services purchased by New Zealand households.

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