Annual inflation at 4.7 percent

New Zealand’s consumers price index increased 4.7 percent in the 12 months to the December 2023 quarter, according to figures released by Stats NZ today.

The 4.7-percent increase follows a 5.6-percent increase in the 12 months to the September 2023 quarter.

“While this is the smallest annual rise in the CPI in over two years, it remains above the Reserve Bank of New Zealand’s target range of 1 to 3 percent,” consumers prices senior manager Nicola Growden said.

Housing and household utilities, the largest contributor to the December 2023 quarter annual inflation rate, was mainly driven by higher prices for rent, construction, and rates.

Rent prices increased 4.5 percent in the 12 months to the December 2023 quarter, while construction and rates increased 3.6 percent and 9.8 percent, respectively.

“The price of housing increased over 2023. Rent is 4.5 percent more expensive than at the end of last year. While the price increase in building a new house has fallen to 3.6 percent, it is 41 percent more expensive than pre-pandemic,” Growden said.

The next-largest contributor to the annual increase was food, due to rising prices for ready-to-eat food and confectionery, nuts, and snacks.

Prices for ready-to-eat food increased 7.3 percent in the 12 months to the December 2023 quarter, following a 9.4-percent increase in the 12 months to the September 2023 quarter.

Confectionery, nuts, and snacks increased 9.7 percent in the 12 months to the December 2023 quarter, following a 10.9-percent increase in the 12 months to the September 2023 quarter.

Alcoholic beverages and tobacco was the next-largest contributor, driven by rising prices for cigarettes and tobacco, and spirits and liqueurs.

Quarterly inflation at 0.5 percent

The consumers price index rose 0.5 percent in the December 2023 quarter, influenced by higher prices for housing and household utilities, offset by lower prices for food.

“Prices for about one-third of all items in the CPI basket decreased in the December 2023 quarter, the most in over three years,” Growden said.

Rent and construction were the two largest contributors to the housing and household utilities group, up 1.1 percent and 0.7 percent, respectively.

Offsetting the quarterly rise was a fall in prices for the food group, due to lower prices for vegetables and for milk, cheese, and eggs, down 14.9 percent and 2.8 percent, respectively.

“Food prices fell every month in the December 2023 quarter, driven by lower prices for summer seasonal vegetables,” Growden said.

Selected price indexes: December 2023 has more information.

Tradeable and non-tradeable inflation

Non-tradeable inflation was 5.9 percent in the 12 months to the December 2023 quarter, driven by rent, construction, and cigarettes and tobacco.

Non-tradeable inflation measures final goods and services that do not face foreign competition, and it 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 3.0 percent in the 12 months to the December 2023 quarter, driven by petrol and confectionery, nuts, and snacks, offset by lower prices for international air transport.

Tradeable inflation measures final goods and services that are influenced by foreign markets.