NZ Inflation down slightly to 7.2%

Inflation has fallen marginally to 7.2%.

Many economists predict the central bank will hike the rate for an eighth straight time. (Source: Breakfast)

The latest consumer price index (CPI) figures were released on Tuesday by Stats NZ, and as forecast, the rate has fallen from July’s 32-year high of 7.3%.

The main driver for the 7.2 percent annual inflation to the September 2022 quarter was housing and household utilities due to rising prices for construction, rentals for housing, and local authority rates, Stats NZ said.

Earlier this month, the Reserve Bank lifted the official cash rate to 3.5%.

CPI rose 2.2% in the September quarter.

Vegetable prices rose 24% in the last quarter, petrol prices went up 19% in the past year, while diesel was up 72%.

“This is the largest quarterly rise in vegetable prices since the series began in September 1999,” prices senior manager Nicola Growden said.

“Tomatoes, lettuce, and broccoli drove this rise in vegetable prices.”

Robertson responds

Finance Minister Grant Robertson said global factors such as the Ukraine invasion and pandemic-related supply constraints are continuing to affect fuel, imported food and building materials.

“Food price rises of 8% for the year were not only influenced by global prices but also by severe weather events that affected growing conditions. Vegetable prices in the quarter rose 24%,” he said.

“The Government will continue to carefully target spending in these highly uncertain times. This is not the time to put that at risk by borrowing for tax cuts that benefit the wealthiest the most, as we have seen recently in the UK.

“This is why we aren’t spending the money saved on the deficit last year and tracking a carefully path back to surplus.”

Inflation embedded – National

National’s finance spokesperson Nicola Willis said inflation was “embedded into the economy” under Labour.

“Runaway prices are making a mockery of Labour’s claims of a strong economy. In reality, out of control inflation means most Kiwis will be poorer tomorrow than they were today,” she said.

“These inflation figures are much worse than even the most pessimistic predictions, and make the Reserve Bank’s hopes of a slow-down look wildly out of touch. Bottom line: New Zealanders must yet again brace for more pain in their back-pockets.”