Annual Inflation At 3.1 Percent In December 2025

Aotearoa New Zealand's consumers price index (CPI) increased 3.1 percent in the 12 months to the December 2025 quarter, according to figures released by Stats NZ today.

The 3.1 percent increase follows a 3.0 percent increase in the 12 months to the September 2025 quarter. The Reserve Bank of New Zealand's target band for the annual inflation rate is 1 to 3 percent.

The 3.1 percent annual inflation rate in the December 2025 quarter is the highest annual rate since the June 2024 quarter, when it was 3.3 percent.

"While the annual inflation rate has slowed considerably since its most recent peak of 7.3 percent in the June 2022 quarter, it has increased each quarter since the December 2024 quarter, when it was 2.2 percent," prices and deflators spokesperson Nicola Growden said.

Like last quarter, the largest contributors to the annual inflation rate were in the housing and household utilities group. In the 12 months to the December 2025 quarter, the main contributors were:

• electricity - up 12.2 percent (10.3 percent contribution to the 3.1 percent annual CPI increase)
• local authority rates and payments - up 8.8 percent (8.7 percent contribution)
• rent - up 1.9 percent (6.9 percent contribution).

"Annual electricity increases remain at their highest since the late 1980s, when there were several major reforms in the electricity market," Growden said.

Other significant contributors to the annual CPI increase were:

• meat and poultry - up 8.2 percent (6.0 percent contribution)
• overseas accommodation - up 9.1 percent (5.8 percent contribution)
• milk, cheese, and eggs - up 9.8 percent (5.1 percent contribution)
• telecommunication services - up 7.0 percent (4.6 percent contribution).

Pharmaceutical products; audio-visual equipment; and games, toys, and hobbies all fell in price over the year.

The 12 months to the December 2025 quarter saw a larger proportion of smaller annual price increases within the CPI basket and fewer annual price decreases, compared with the previous 12 months.

"More than 80 percent of the CPI basket increased in price over the past year - the highest proportion of increases recorded in 18 months," Growden said.

"Over half of the CPI basket increased in price by 3.0 percent or less."

Quarterly inflation at 0.6 percent

The CPI rose 0.6 percent in the December 2025 quarter, compared with the September 2025 quarter.

Higher prices for international air transport was the largest contributor to the quarterly inflation rate, up 7.2 percent. One-fifth of the 0.6 percent quarterly increase in CPI was due to the increase in international air transport prices.

Airfares to Asia, Australia, and Africa drove the increase in international airfare prices in the December 2025 quarter.

"Prices for international air transport typically increase during the New Zealand summer holidays as demand for overseas travel picks up," Growden said.

Petrol prices also increased, up 2.5 percent in the December 2025 quarter.

The average price for one litre of 91 octane fuel was $2.61 in the December 2025 quarter, up from $2.54 in the September 2025 quarter.

"Petrol makes up about 3.5 percent of the CPI basket," Growden said.

"Higher petrol prices contributed almost 0.1 percent of the 0.6 percent quarterly CPI increase."

Lower vegetable prices, down 16.5 percent, helped offset the quarterly rise.

"Lower prices for seasonal vegetables like tomatoes, cucumbers, capsicums, lettuce, and broccoli contributed to the fall in vegetable prices," Growden said.