Annual inflation in New Zealand increased 6.7%; Inflation is still at levels not seen since the 1990s

April 28, 2023

The consumers price index increased 6.7 percent in the 12 months to March 2023, according to figures released by Stats NZ today.

The 6.7 percent increase follows a 7.2 percent increase in the 12 months to December 2022.

“Inflation is still at levels not seen since the 1990s,” consumer prices senior manager Nicola Growden said.

Food was the largest contributor to the March 2023 annual inflation rate. This was due to rising prices for vegetables, ready-to-eat food, and milk, cheese, and eggs.

Vegetable prices increased 22 percent in the 12 months to March 2023, while ready-to-eat food and milk, cheese and eggs increased 9.7 percent and 15 percent, respectively.

After food, the next largest contributor to the annual increase was housing and household utilities.

The increase was due to rising prices for both construction and rents.

Prices for building a new house increased 11 percent in the 12 months to March 2023, following a 14 percent increase in the 12 months to December 2022.

“Respondents reported that higher costs of materials and labour continued to drive the increase of building a new home,” Growden said.

Rents increased 4.3 percent in the 12 months to March 2023. This follows an increase of 4.4 percent in the 12 months to December 2022.

Recreation and culture was the next largest contributor, driven by rising prices for domestic accommodation services and pets and pet related products, such as pet food.

Slightly offsetting these increases was a decrease in petrol, down 8.3 percent in the 12 months to March 2023, following a 2.4 percent increase in the 12 months to December 2022.

Quarterly inflation at 1.2 percent

The consumers price index rose 1.2 percent in the March 2023 quarter, influenced by rising prices in the food, alcoholic beverages and tobacco, and housing and household utilities groups.

Vegetables and fruit were the largest contributors to food prices, up 8.6 percent and 11 percent, respectively.

Food price index: March 2023 has more information about food prices.

The annual tobacco tax increase on 1 January 2023 lifted cigarette and tobacco prices 7.6 percent in the March 2023 quarter.

“The average price of a pack of 25 cigarettes was $48.71 in March 2023,” Growden said.

“One cigarette now costs about $1.95, 10 years ago cigarettes cost about 83 cents each.”

Annual update of key results 2021/22: New Zealand Health Survey has more information about declining smoking rates.

Non-tradeable and tradeable inflation

Non-tradeable inflation was 6.8 percent in the 12 months to March 2023, the highest since the series began in June 1999.

The 6.8 percent increase was driven by higher prices for construction, rents, and ready-to-eat food.

Non-tradeable inflation measures final goods and services that do not face foreign competition and 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 6.4 percent in the 12 months to March 2023, driven by higher prices for international air transport.

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

Source: STATS NZ
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