On the 20th of April 2023, Statistics New Zealand released the latest CPI figures revealing a quarterly rate rise of 1.2%, with the annual inflation rate being 6.7% for the 12 months to the March 2023 quarter.
The quarterly change in the March quarter is the lowest quarterly increase since March 2021. The movement suggests that inflation is not rising as quickly as previously thought and has now peaked, which comes as a surprise to some. Economists at ANZ have predicted that the CPI will continue in a downward trend for the next 12 months. The levels of inflation we have been seeing over the past 18 months, have not been seen since the 1990s.
The biggest contributors to the quarterly changed were; housing and household utilities rising a further 1.0 percent and 7.1 percent for the 12 months to the March 2023 period, with property rates and related services having the biggest impact. Another contributor was food prices, having increased by 3.7 percent and 11.3 percent in the 12 months to the March 2023. Fruit and vegetable costs being the main influencer at 20.2 percent for the 12 months.
The Reserve Bank OCR rose from 4.75% to 5.25%, an increase of 50 basis points, as of the 5th of April 2023 to attempt mitigate inflation and return it to the 1.3% target range over the medium term. If you would like to read more about how the OCR affects property investment, click here: