Inflation up as Kiwi dollar falls

  • 16/07/2015
Inflation up as Kiwi dollar falls

By Paul McBeth

New Zealand consumer prices rose in the second three months of the year as a weaker currency and higher global oil prices lifted the cost of petrol, and housing continued to get more expensive.

The consumers price index rose 0.4 percent in the three months ended June 30, turning around two quarters of deflation, according to Statistics New Zealand.

Annual inflation rose at a 0.3 percent pace, accelerating from the 0.1 percent yearly increase three months earlier, though still below the central bank's target band of between 1 percent and 3 percent.

The New Zealand dollar fell to a fresh five-year low of US65.61 cents following the release of the data on Thursday morning.

A rebound in petrol prices underpinned the quarterly gain, with fuel prices up 8.8 percent in the three month period. On an annual basis, petrol prices were down 7.4 percent.

"The main impact came from higher petrol prices, which were up 8.8 percent in the June quarter," Statistics NZ prices manager Chris Pike said.

"Without petrol, the CPI was flat for the quarter."

Housing-related prices contributed to the quarterly increase in inflation, with a 1.5 percent rise in the cost of new housing and a 0.6 percent increase in rentals. New housing prices rose 5.3 percent in the year ended June 30, while rental prices advanced 2.3 percent.

Household electricity prices rose 0.6 percent in the quarter, and were unchanged on an annual basis, while gas prices fell 0.4 percent in the June period, and were 0.9 percent on the year.