Photo: RNZ
- Consumer prices rise 0.9 percent in March quarter
- Annual inflation rate 2.5 percent from 2.2 percent
- Higher fuel, housing, rents, some groceries prices, tertiary fees drive increase
- International airfares, games, toys, telco equipment fall
- Bump in prices unlikely to prevent further RBNZ rate cuts
- Stats NZ revamps CPI basket - meal kits, cruises, smart watches in; ties, furniture out
Inflation has edged higher on the back of more expensive petrol, rents, housing, and tertiary fees, but remains in the Reserve Bank's target band and unlikely to prevent further rate cuts.
Stats NZ said the consumer price index rose 0.9 percent in the three months ended March, the biggest quarterly increase since the September quarter of 2023.
The annual rate rose to 2.5 percent from 2.2 percent, the highest since June last year.
"The annual inflation rate is within the Reserve Bank of New Zealand's target band of 1 to 3 percent for the third consecutive quarter," senior manager of prices Nicola Growden said.
Domestic prices - non-tradables - remained the backbone of inflation, notably rates, rents, and the costs of purchasing a new house.
Non-tradables rose 1.1 percent for the quarter, and 4.0 percent for the year.
Rents were the single biggest contributor to the annual inflation rate, rising 3.7 percent for the year and making up 14 percent of the rise.
"This is the first time annual rent has increased by less than 4 percent since 2021," Growden said.
By comparison, the price of imported goods and services - tradables - rose 0.8 percent for the quarter and by 0.3 percent for the year, reflecting the general fall in fuel prices over the past year.
The inflation numbers were a shade above the Reserve Bank's (RBNZ) February forecasts, but economists generally agree that the bump higher will not prevent further cuts to the official cash rate in coming months.
Stats NZ has revamped the make up of the consumer price index and the weighting of various goods and services.
To reflect changing consumer buying patterns old technology such as DVDs, home telephone lines, and electric fan heaters have been dumped and replaced by smart watches.
Similarly cruises, delivered meal kits, and cocktails are in, while liqueurs, ties, men's jerseys and lounge suits are out.
The weightings have also changed so that rents, insurance, and housing purchase costs make up a slightly higher proportion of the overall index.
