Prices keeping inflation lower than expected
Rising power and building costs are adding to consumer pressure, but overall inflation is lower than expected, according to figures released today.
The consumers price index rose 1.6 per cent for the year to June, barely changed from the March year, and it was up just 0.3 per cent in the June 2014 quarter, Statistics New Zealand said.
Bank economists had been expecting a quarterly rise of between 0.4 per cent to 0.5 per cent, which would have taken annual inflation close to 2 per cent.
"Higher housing-related prices and vegetable prices were partly countered by cheaper package holidays, cars, and fruit," Statistics NZ prices manager Chris Pike said.
Prices for housing and household utilities rose 1.2 per cent reflecting higher prices for electricity (up 4.2 per cent), rents (up 0.6 per cent), and buying newly built houses excluding land (up 1.2 per cent).
Food prices rose 0.9 per cent, influenced by higher prices for fruit and vegetables (up 4.9 per cent). Seasonally higher prices for vegetables (up 13 per cent) were partly offset by seasonally lower prices for fruit (down 4.9 per cent).
Package-holiday prices were down 6.5 per cent and there were seasonally lower prices for accommodation services (down 4.5 per cent).
Vehicle prices were down 1.2 per cent, reflecting a 1.5 per cent fall in second-hand car prices.
Annual inflation was 1.6 per cent, compared with 1.5 per cent in the year to March. Inflation remains well below the Reserve Bank's 2 per cent mid-point of its target range.