CPI obscures the real rise in cost of living - economist

The latest inflation figures disguise the true rise in the cost of living, according to a prominent economist.

Statistics NZ on Wednesday said the Consumer Price Index (CPI) - which measures changes in the day-to-day cost of living - was up 1.9 percent over the past 12 months.

Rises were recorded in the cost of housing and utilities, rates, transport, alcohol and tobacco.

"We've had small increases in some prices, but there are some that have been going up a lot, so the headline numbers I think are quite misleading," Shamubeel Eaqub told The AM Show on Thursday.

"When you look at the official measure it includes things like big-screen TVs and furniture - things that have come down in price - but the things that you spend your money on every week, those things have been rising quite a lot.

"You've got to fill up your car, you try to pay your rent, your rates, your insurance - those things have gone up a lot."

The recent drop in the price of petrol isn't reflected in the figures, which measure up until December.

Rents went up most in Wellington, up 4 percent year-on-year, with Auckland up 2.2 percent - the smallest annual increase in four years - and 2.9 percent across the rest of the North Island.

Canterbury rents stagnated, up only 0.8 percent - behind inflation - with the rest of the South Island up 2.8 percent.

Auckland house purchase prices crept up 2.2 percent, barely ahead of inflation, while across the rest of the North Island they rocketed up 6.9 percent. Canterbury (1.2 percent) again held the South Island (5.7 percent) in check.

Big drops were recorded in communication (down 21 percent) and education (down 5.5 percent, thanks to a 16 percent fall in the cost of tertiary education).