Thursday, August 11, 2022

Annual inflation hits 32-year high in June

Inflation has hit a 32-year high on the back of big rises in fuel costs.

Inflation hit a 32-year high, at 7.3% for the year to June 30, as measured by the consumers price index, Statistics New Zealand announced this morning.

The increase, higher than the 7% annual rate forecast in May by the Reserve Bank of New Zealand, was driven in part by a hefty 1.7% rise in the general level of prices in the June quarter, with transport fuel prices – petrol and diesel – the biggest factor in the increase.

The government moved yesterday to try and take some of the political sting out of what it could be sure would be a high inflation number by announcing a further extension, to January 31, 2023, of cuts to fuel excises and road user charges and a continued halving in fares for public transport.

“The average price of one litre of 91 octane petrol rose 6.3% to $2.84 in the June 2022 quarter, compared with $2.67 in the March 2022 quarter,” Stats NZ said. 

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Average diesel price per litre were even more dramatic, up 30% to $2.57, compared with $1.98 in the March quarter.

The largest contributors over the course of the last year to the highest annual inflation since the year to June 1990, when inflation ran at 7.6%, came from housing construction and rental costs.

Prices for the construction of new dwellings increased 18% in the June 2022 quarter compared with the June 2021 quarter.

In the June 2022 quarter compared with the March 2022 quarter, construction prices rose 4.5%, while rentals for housing rose 1.2%.

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