Consumer price index: Annual inflation remains steady at 7.2 percent

New Zealand's annual consumer price index (CPI) has remained steady in the December quarter at 7.2 percent. 

It comes after another 7.2 percent annual increase in the September 2022 quarter and a 7.3 percent increase in the June 2022 quarter.

Housing and household utilities were the largest contributors to December's inflation driven by rising prices for both constructing and renting housing.

Prices for building a new house increased 14 percent in the 12 months to December, following a 17 percent increase in the 12 months to September.

"Respondents reported more expensive materials and higher labour costs are driving the increase of building a new home," consumer prices senior manager Nicola Growden said.

Rental prices for housing increased 4.4 percent in the 12 months to December. It follows an annual increase of 4.6 percent in the September quarter.

After housing and household utilities, the next largest contributor was food. 

"Higher prices for ready-to-eat food, vegetables, and meat and poultry drove the overall increase in food prices," Growden said.

Transport was next, driven by rising prices for both international and domestic airfares.

Quarterly inflation at 1.4 percent

The consumers price index rose 1.4 percent in the December 2022 quarter, influenced by rising prices in the housing and household utilities, food, and recreation and culture groups.

Transport prices rose 0.9 percent and international airfares rose 19 percent, which was partly offset by petrol prices falling 7.2 percent.

Non-tradeable and tradeable inflation

Non-tradeable inflation was 6.6 percent in the 12 months to December driven by higher prices for the construction of a new house.

Tradeable inflation was 8.2 percent, driven by higher prices for international airfares.

Non-tradeable inflation measures goods and services that do not face foreign competition and is an indicator of domestic demand and supply conditions. However, the inputs of these goods and services can be influenced by foreign competition.

The increase is lower than the 7.5 percent the Reserve Bank of New Zealand was expecting, but still well outside its 1 to 3 percent mandate.