Inflation outside target range

The consumers price index (CPI) increased 3.1 per cent in the year to the December quarter, according to the latest figures from Stats NZ.

It follows a three per cent increase in the 12 months to the September 2025 quarter, with Stats NZ noting the Reserve Bank of New Zealand’s target band for the annual inflation rate is one to three per cent.

The inflation rate in the December quarter is the highest annual figure since the June 2024 quarter, when it was 3.3 per cent.

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

The largest contributors to the latest rate were electricity, rents and local authority rates and payments.

As for the transport group, its prices increased 2.6 per cent year-on-year. This included the purchase of vehicles rising 1.1 per cent and passenger transport services climbing by 2.2 per cent.

When it came to quarterly inflation, the CPI rose 0.6 per cent in the December 2025 quarter when compared with the September period.

Higher prices for international air transport were the largest contributor to that increase after rising 7.2 per cent. 

The transport group grew by 2.3 per cent quarter-on-quarter after prices for purchasing vehicles rose 0.4 per cent and passenger transport services climbed by 5.8 per cent.