Inflation rose 0.3% in the June quarter – below the consensus forecasts of 0.5%.That takes the annual figure to 1.8%.The main upward pressure is from the hike in tobacco related excise tax in April, which pushed prices for that class of goods up 8.7
Inflation rose 0.3% in the June quarter – below the consensus forecasts of 0.5%.
That takes the annual figure to 1.8%.
The main upward pressure is from the hike in tobacco related excise tax in April, which pushed prices for that class of goods up 8.7%.
However Statistics New Zealand’s “trimmed mean measure” of inflation – which takes out extreme price rises and falls – shows the quarterly increase is between 0.3% and 0.4%, and the annual trimmed mean is between 1.9% and 2% – both slightly above the actual increase and suggesting inflation pressures are running slightly higher than the headline figure.
As is usual, the “non tradeable” part of the economy saw higher price pressures than the tradeable part – that is, the part which competes with overseas prices.
By one quirk of the system, cigarette and tobacco prices are classed as a “non-tradeable” even though they are largely imported. This is because most of their price is not price at all but tax.
Tradeable inflation actually fell for the quarter, down 0.1%. The non-tradeable items rose 0.6% in price. On an annual basis tradable inflation rose 1.1% while non-tradebles rose 2.2%.
Annual increases for non-tradeable inflation were 3% or more over the past eight years, says Statistics New Zealand – a high level of inflation mostly driven by house prices and government sector imposts such as local body rates, the mostly government owned electricity prices, and other government charges.
The latest inflation figure represents a pause before what is expected to be a series of peaks over the coming year which are predicted to take the headline rate to 5% or more.
The current quarter sees accident compensation levies for motor vehicles rise and the emissions trading scheme add to energy prices. Changes to the taxation of insurance companies also take effect and these are expected to push up premiums.
The biggest single jump will be the October rise in GST from 12.5% to 15%.
