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September quarter 2024 inflation rate within Reserve Bank’s target range at 2.2%

Wednesday, 16 October 2024

The annual inflation rate has dropped to 2.2%, down from 3.3% in the previous June quarter, according to the latest update from Stats NZ.
The annual inflation rate has dropped to 2.2%, down from 3.3% in the previous June quarter, according to the latest update from Stats NZ.

Costs are still rising in New Zealand, but the rate at which prices are increasing is slowing.

The annual inflation rate has dropped to 2.2%, down from 3.3% in the previous June quarter, according to the latest update from Stats NZ.

It means that prices were 2.2% higher in September compared to a year ago. It's a figure that - for the first time since March 2021 - is within the Reserve Bank's target band of between 1% and 3%.

'Prices are still rising, but not as much as previously recorded,' Stats NZ's consumer prices manager Nicola Growden said.

It means that prices were 2.2% higher in September compared to a year ago.
It means that prices were 2.2% higher in September compared to a year ago.

The 2.2% inflation increase was driven largely by goods and services here in New Zealand, described by Stats NZ as 'non-tradeables' - or domestic - inflation. The domestic inflation rate was 4.9%.

Higher rent prices in New Zealand were the biggest contributor to the overall inflation rate, up 4.5%. It made up almost a fifth of the 2.2% increase.

Prices for local authority rates increased by 12.2% in the 12 months to September, making up 16% of the overall 2.2% increase.

Insurance costs increased by 12.9%.

Costs are still rising in New Zealand, but the rate at which prices are increasing is slowing.
Costs are still rising in New Zealand, but the rate at which prices are increasing is slowing.

The cost of pharmaceutical products also rose by 17.3%, due to the Government's re-introduction of $5 prescription fees.

What helped to offset domestic inflation, was a 22.8% reduction in the price of early childhood education, due to the Government's introduction of the FamilyBoost policy that subsidises the cost for parents.

'Many families are seeing increased weekly fees, however the FamilyBoost rebates have lowered the total cost of early childhood education,' Growden said.

Domestic air travel prices also fell by 11.2%.

What also helped to slow the overall inflation rate was that the price of goods and services influenced by foreign markets - knowns as 'tradeables' - decreased, by -1.6%.

Petrol prices were down 8%, while vegetable prices fell by 17.9%.

How does NZ's inflation rate compare?

New Zealand: 2.2%

Australia: 2.7%

The Reserve Bank has cut the Official Cash Rate by 50 basis points, dropping it to 4.75%. The move has triggered immediate interest rate reductions across major banks, giving homeowners a break ahead of the holiday season. Zane Small reports.

United Kingdom: 2.2%

United States: 2.4%

European Union: 2.2%