‘Household basics like rent, food, and electricity all hit consumers’ pockets harder this quarter.’ – Jason Attewell, Statistics NZ
Inflation in New Zealand hampered unexpectedly in the second quarter, suggesting that declining oil prices were restraining cost pressures throughout the country’s economy. Statistics New Zealand reported on Monday that its Consumer Price Index was flat on a seasonally adjusted basis in the June quarter, following a 1% rise in the Q1 and falling behind expectations for a 0.2% increase. The largest upward contribution was provided by higher food prices with 0.7% jump pushed by vegetable prices. Meanwhile, the largest fall was registered in transport prices, which were down 1.3% amid lower prices of petrol and seasonally cheaper domestic airfares and car rentals. On an annual basis, the most of downward pressure came from lower telecommunication services prices and cheaper equipment. In regional terms, Auckland registered the highest increase of 3.0% in the reported quarter. The Reserve Bank of New Zealand previously signalled that it was set to keep its interest rates at a record low of 1.75% until late 2019, but recent data fuelled expectations for a rate hike by mid-2018.
