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Inflation Hits Three-Year Low in New Zealand
In a positive turn for the New Zealand economy, the annual rate of inflation has dropped to its lowest level in three years. Statistics New Zealand (Stats NZ) reported a 3.3% increase in the Consumer Price Index (CPI) over the 12 months leading up to the June quarter.
The CPI serves as an annual metric that tracks changes in the prices of goods and services. This latest announcement has been met with approval from Finance Minister Nicola Willis, though she acknowledged that many New Zealanders continue to face challenges with the cost of living.
The current 3.3% rise marks a notable decrease from the 4% increase observed in the 12 months ending in March 2024. This downward trend is even more significant when compared to the inflation peak of 7.3% in June 2022.
According to Nicola Growden, the senior manager of consumer prices at Stats NZ, the current rate of increase mirrors what was seen three years ago. The Reserve Bank of New Zealand aims to keep consumer inflation within a target range of 1% to 3%.
Growden highlighted that housing and household utilities were the primary contributors to the current inflation rate. “This was due to rising prices for rent, construction of new houses, and rates,” she explained. Over the past year, rents have surged by 4.8%, the construction of new houses by 3.0%, and rates by a substantial 9.6%.
The second largest contributor to inflation was the category of miscellaneous goods and services, driven by escalating insurance prices. Insurance costs have increased at the highest rate since 2009, with a 14% annual rise up to June 2024, nearly doubling the previous peak seen in June 2009. “Increases in dwelling and vehicle insurance premiums largely drove the higher insurance prices,” Growden added.
A Positive Outlook from the Finance Minister
Finance Minister Nicola Willis expressed optimism about the latest inflation data, stating, “We are turning our economy around and winning the fight against rampant inflation.” She acknowledged the continued struggles faced by many due to the cost of living crisis but affirmed the Government’s commitment to economic recovery.
Willis emphasized that the current data supports the Government’s strategy of combining investment in frontline services with efforts to curb inflation, describing it as the “right” approach for Budget 2024. She highlighted the upcoming tax relief package, set to take effect at the end of the month, which aims to provide further financial relief to low and middle-income families by allowing them to retain more of their earnings.
“We are dedicated to rebuilding our economy so that workers, businesses, and families can get ahead,” Willis concluded.
SOURCE: 1NEWS