Inflation falls

Statistics New Zealand has reported a drop to 3.3% in annual inflation, almost halved when compared with June 2023 (6%).

This fall in inflation is welcome, but it is being driven by international factors rather than domestic actions. There are also costs for working people that continue to increase rapidly,” said NZCTU Economist Craig Renney.

“This data is also weaker than expected – suggesting problems within the wider economy. It supports other data which implies that we might be heading back into falls in economic output.”
The falls in inflation were driven by reductions in the price of food, particularly fruit and vegetables. There were also falls in the price of furniture, household appliances, and the cost of second-hand vehicles, suggesting a lack of demand in the economy and a lack of consumer confidence.

Falls were recorded in IT equipment and international airfares, again suggesting that demand for these discretionary goods may be falling. Rental prices continues to increase rapidly, rising 4.8% annually, the fastest rate of growth for 17 years, which is as far back as the data goes. Local Authority Rates increased 9.8%. Insurance prices increased 14% annually, led by growth in property insurance (24%) and car insurance (24%). Petrol prices rose 14.7%.