Annual inflation remains at 7.2 percent

The consumers price index increased 7.2 percent in the 12 months to December 2022, Stats NZ said today.

The 7.2 percent increase follows 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 was the largest contributor to the December 2022 annual inflation rate. This was due to rising prices for both constructing and renting housing.

Prices for building a new house increased 14 percent in the 12 months to December 2022, 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 2022. This follows an annual increase of 4.6 percent in the September 2022 quarter.

After housing and household utilities, the next largest contributor to the annual increase was from the food group.

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

Transport was the next largest contributor, driven by rising prices for both international and domestic air fares.

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 in the December 2022 quarter. 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 2022 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.