New Zealand’s inflation increased 6.0% in the 12 months to June 2023

New Zealand’s consumers price index increased 6.0 percent in the 12 months to June 2023, according to figures released by Stats NZ today.

The 6.0 percent increase follows a 6.7 percent increase in the 12 months to March 2023.

“Prices are still increasing at rates not seen since the 1990s but are rising at a lower rate than the last few quarters,” consumers prices senior manager Nicola Growden said.

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

Vegetable prices increased 23.3 percent in the 12 months to June 2023, while ready-to-eat food and milk, cheese, and eggs increased 9.8 percent and 13.8 percent, respectively.

Food price index: June 2023 has more information on food prices.

“With food prices up 12.3 percent annually, consumers may be buying cheaper alternatives to keep their food bill lower,” Growden said.

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 7.8 percent in the 12 months to June 2023, following an 11.5 percent increase in the 12 months to March 2023.

“The price of building a new home has increased by more than a third in the three years from the June 2020 quarter,” Growden said.

Rents increased 4.2 percent in the 12 months to June 2023, following an increase of 4.3 percent in the 12 months to March 2023.

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

Slightly offsetting these increases was a decrease in the transport group, with prices for petrol decreasing 15.0 percent in the 12 months to June 2023, following a decrease of 8.3 percent in the 12 months to March 2023.

Quarterly inflation at 1.1 percent

The consumers price index rose 1.1 percent in the June 2023 quarter, influenced by higher prices for food, and housing and household utilities. The higher prices were partly offset by lower prices for transport.

Ready-to-eat food and vegetables were the two largest contributors to the food group, up 3.1 percent and 4.0 percent, respectively.

The housing and household utilities group was the next largest contributor to the quarterly increase, with higher prices for rents and construction.

Prices for rent and construction both rose 1.1 percent in the June 2023 quarter.

Offsetting these increases was a fall in transport, driven by lower prices for international airfares and petrol, down 11.9 percent and 1.5 percent, respectively.

Half-price public transport fares, the 25 cent a litre cut in fuel excise duty, and the cut in road user charges were removed on 1 July 2023. Any impact this will have on prices will come through in the September 2023 quarter.

Tradeable and non-tradeable inflation

Non-tradeable inflation was 6.6 percent in the 12 months to June 2023, 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 5.2 percent in the 12 months to June 2023, driven by higher prices for vegetables and international air transport while being partly offset by falling petrol prices.

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