Low vehicle prices offset petrol hikes

Prices rose 0.1 per cent in the December 2017 quarter, Stats NZ said today. Higher petrol prices, air fares, and housing-related costs were countered by lower prices for new cars, and a range of household goods.

New car prices were down 6.2 per cent for the December quarter. 

The relatively flat result this quarter leaves the consumers price index (CPI) inflation rate at 1.6 percent for the December 2017 year. Inflation was 1.9 percent for the September 2017 year.

The CPI measures the rate of price change of goods and services purchased by New Zealand households and is a key measure for the Reserve Bank in setting interest rates and is commonly used in adjusting pay rates and other contracts.

Quarterly change

In the December 2017 quarter compared with the September 2017 quarter, the CPI rose 0.1 percent (up 0.4 percent with seasonal adjustment).

Purchase of vehicles fell 2.1 per cent for the quarter due to new car prices, down 6.2 per cent. However, second-hand vehicles were up 0.8 per cent.

Food prices fell 1.7 percent in the December 2017 quarter, influenced by seasonally lower vegetable prices, down 19 per cent.

“Retail prices fell by more than usual in the December 2017 quarter, contributing to lower inflation than widely expected,” prices senior manager Jason Attewell said.

“Changing retail pricing strategies have led to lower prices for a range of household items, while specials drove new car prices down 6.2 per cent.”

Lower prices for vehicles were countered by higher prices for passenger transport services, which rose 9.2 per cent. Private transport supplies and services prices rose 4.1 percent, with petrol prices up 6.1 percent.

“Petrol prices were up in the December quarter, following two quarters of falls,” Attewell said. “Rising oil prices and a falling exchange rate pushed prices up sharply between July and November this year. The average price for 91 octane petrol hit $1.94 in the December 2017 quarter, up from $1.83 in the September 2017 quarter.”

Annual change

From the December 2016 quarter to the December 2017 quarter. The CPI inflation rate was up 1.6 per cent.

Purchase of vehicles decreased 2.0 per cent, influenced by lower prices of new vehicles, down 6.7 per cent. 

However, this was covered by higher prices for petrol and cigarettes. Private transport supplies and services prices increased by 4.6 per cent as petrol prices rose by 6.5 per cent. Cigarettes and tobacco prices also increased 9.9 per cent.

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