New Zealand's Consumer Price Index (CPI) rose by 4% in the 12 months leading to the March 2024 quarter, a decrease from the previous quarter's 4.7% increase. Despite being the smallest increase since June 2021, inflation remains above the Reserve Bank's target range of 1 to 3%. This aligns with economist forecasts, with the Reserve Bank anticipating a 3.8% decrease in February, though most local economists expected higher rates.
Contributing to this inflation were rising prices for housing and household utilities, particularly rent, new house construction, and rates, which increased by 4.7%, 3.3%, and 9.8%, respectively. Rent prices saw the highest increase since the series began in September 1999. Recreation and culture also contributed, driven by price hikes in international accommodation and cultural services, including subscription TV and cinema tickets.
Acting Finance Minister Chris Bishop welcomed the news, highlighting the importance of low and stable inflation for long-term success and cost of living relief. He emphasized the need for inflation to fall within the Reserve Bank's target range to enable interest rate adjustments and stimulate economic growth.