The consumers price index (CPI) basket of goods and services used to measure inflation will be updated in April 2025, Stats NZ said today.
The CPI represents inflation experienced by New Zealand households. To measure the CPI, Stats NZ collects thousands of prices and use weights from a hypothetical ‘basket of goods and services’ that represent what New Zealand households purchase.
The CPI basket and weights are regularly reviewed to ensure the items in the basket accurately reflect what New Zealand households are currently purchasing.
“Updating the CPI basket will ensure that headline CPI accurately reflects the inflation New Zealanders are experiencing,” economic and environmental insights general manager Jason Attewell said.
“This is especially important during a time of high inflation as higher prices can lead to households buying different items, or changing how much they spend on things like rent, food, and luxury items.”
The main data source for the CPI reweight is the expenditure part of the Household Economic Survey, which collects information on what items consumers buy. Household spending patterns change over time as tastes, lifestyles, and incomes change, and as the range of goods and services available for households to purchase changes.
The Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ) is a key user of the CPI to help set monetary policy and for monitoring economic performance. The RBNZ may adjust the official cash rate based on the CPI, which may mean banks adjust their interest rates.
The RBNZ welcomes the news that the weights will be updated.
“Reweighting the CPI will support the Monetary Policy Committee in assessing the state of the economy and inflation pressures, particularly in periods of heightened economic uncertainty and volatility,” RBNZ chief economist Paul Conway said.
The updated weights will be published with the March 2025 quarter CPI release, in April 2025. International best practice is for CPI weights to be updated at least every five years. The upcoming update to New Zealand’s CPI weights will fall within this time frame.
