New Zealand consumer prices fell in the year to March despite the cost of food skyrocketing, but surprisingly lower fuel costs helped to cool underlying inflation.
The consumer price index (CPI) climbed 6.7 percent annually in March after advancing 7.2 percent in the 12 months to December, Statistics NZ said on Thursday. Quarter-by-quarter, the CPI increased 1.2 percent - a smaller three-month gain than expected.
Reaction:
Brad Olsen, Infometrics chief executive
"Inflationary pressures have moderated, more than expected, with annual inflation decelerating back to 6.7 percent.
"That's encouraging news and shows the intense inflationary pressures we've been seeing are starting to be dampened just a bit.
"Annual inflation of 6.7 percent is still too high but shows we're at least on the right path."
Mark Smith, ASB senior economist
"Softer-than-expected increases for tradable goods prices largely explain the downward surprise, with the 0.7 percent Q1 rise in tradable prices the lowest since 2020 and the 6.4 percent rate the lowest since 2021 Q3. Excluding food prices, tradable prices were down 0.7 percent in Q1 up only 4.4 percent for the year.
"A look through the details showed few signs of a Cyclone Gabrielle boost to inflation. Food prices, construction costs and rents, dwelling maintenance services and insurance did not increase to the extent they could have done."
Virginia Nicholls, New Zealand Alcohol Beverages Council director
"The continuing inflationary pressure, including rising ingredient and packaging costs, skill shortages, higher interest rates, and recent flooding and cyclones means that an increased excise tax will more than likely need to be passed onto consumers."
Grant Robertson, Finance Minister
"The Government is committed to bringing down the cost of living and supporting New Zealanders through these difficult times.
"While lower than expected, today's result is still elevated by the impact of flooding and cyclone events on food prices, with prices increasing 8.6 percent for vegetables. The prices of second-hand cars and insurance were also elevated.
"The effects of the cyclone will flow through into the June quarter results as well.
"Treasury forecast inflation will be 0.4 percentage points higher in the first half of the year because of the extreme weather. We don't have control over what the weather does but we know it puts a strain on households' budgets."
Nicola Willis, National Party Finance spokesperson and deputy leader
"It's a sad day when New Zealanders are being told to believe that annual price rises of 6.7 percent are somehow good news.
"The reality is that today's data confirms the cost of living crisis has become a struggle without end for far too many New Zealanders and their families.
"Inflation in New Zealand has been far too high for far too long. Today's CPI figures mark the 24th month of New Zealand inflation levels being out of control, even while interest rates have been pummelling Kiwis with [an] ever-blunter force.
"This proves New Zealand's inflation problem can’t just be blamed on global factors. The Labour Government's stubborn refusal to rein in spending, reduce costs or fix worker shortages has fuelled our home-grown inflation fire, helping constant price rises become entrenched in our economy."
Chlöe Swarbrick, Green Party Revenue spokesperson
"Inflation hits lower-income families the hardest, who spend the majority of their income covering the essentials like food and rent. Wealth and income inequality in this country is a political choice.
"The solution is taxing wealth and excess profits and using that money to help people. This makes the most sense in the context of the approximately trillion-dollar wealth transfer to the wealthiest throughout COVID-19."
David Seymour, ACT Party leader
"Today's CPI marks almost two years of inflation above the Reserve Bank's target range, it is the fifth time in a row it has been more than double the maximum of the target range.
"Too many Kiwi families are struggling just to keep their heads above water. They can see what the problems are but the Government is so disconnected from the realities of working New Zealanders, it feels hopeless.
"For a long time, Labour has said inflation isn't its fault, blaming overseas factors. Now that inflation of tradeables, things that can be bought and sold overseas, is easing, the attention turns to non-tradable inflation, which is going up.
"This proves what Treasury said earlier this week and what ACT has been saying for years now. This cost of living crisis is a wasteful Government spending crisis."
