New Zealand CPI Dips 0.5% On Quarter In Q4

(RTTNews) - Consumer prices in New Zealand slid 0.5 percent on quarter in the fourth quarter of 2015, Statistics New Zealand said on Wednesday - marking the largest quarterly decline since 2008.

That was beneath expectations for a decline of 0.2 percent following the 0.3 percent increase in the third quarter.

"Lower prices for petrol and vegetables were partly countered by higher prices for housing-related costs and airfares," consumer prices manager Matt Haigh said.

Petrol prices (down 7.0 percent) made the largest downward contribution for the quarter. Excluding petrol, the CPI showed a 0.2 percent decline.

The average price of a liter of 91 octane petrol in the December 2015 quarter was NZ$1.84, compared with NZ$1.98 in the September quarter. By the end of the December quarter, petrol pump prices were 4.5 percent below the average price for the quarter.

Vegetable prices showed a seasonal fall (down 17 percent) in Q4. After adjusting for seasonal effects, vegetable prices were unchanged. Fresh milk prices fell 6.5 percent, and were at their lowest level since the December 2009 quarter.

Prices for tradable goods and services fell 1.8 percent, with the stronger New Zealand dollar lowering prices for petrol and overseas package holidays. Non-tradable goods and services showed a 0.5 percent rise, a range of housing-related price rises, and higher domestic air fares.

On a yearly basis, inflation added 0.1 percent - also shy of forecasts for an increase of 0.3 percent and down from 0.4 percent in the three months prior. It also marked the smallest annual increase since 1999.

Petrol prices (down 8.1 percent) made the largest downward contribution for the year. Excluding petrol, the CPI showed a 0.5 percent increase on year in Q4.

The small movement for the year was also influenced by both lower vehicle relicensing fees and international air fares.

Housing and household utility prices were up 2.8 percent in the year, with higher prices for housing rentals (up 2.5 percent), newly built houses excluding land (up 5.0 percent), and local authority rates (up 6.2 percent).

"Housing-related prices in Auckland increased by more than the national average, with new houses up 7.2 percent and rents up 3.3 percent from a year earlier," Haigh said.