Photo: RNZ
Inflation has slowed to a three-year low, with the consumer price index (CPI) falling back into the Reserve Bank's target band.
Stats NZ said the consumer price index rose 0.6 percent in the three months ended September, taking the annual rate to 2.2 percent from 3.3 percent - the lowest since March 2021.
The biggest contributors to the quarterly result were higher rates, food and medical costs, which offset cheaper fuel and early childhood costs.
"Prices are still rising, but not as previously recorded," Stats NZ senior manager of prices Nicola Growden said.
Government policy changes affected several price moves.
The reimposition of prescription charges was a driver in the 10.1 percent rise of medical products and services.
However, the scrapping of the Auckland regional fuel tax contributed to lower transport costs, and the Family Boost Scheme subsidy for pre-school childcare lowered education costs.
Official taxes on tobacco and alcohol increased prices by 10 percent.
Stubborn domestic inflation
Domestic prices - known as non-tradables - remained the backbone of inflation, notably rates and rents.
Non-tradables rose 1.3 percent for the quarter, and 4.9 percent for the year.
Local authority rates rose 12.2 percent, accounting for more than half the quarterly inflation rate.
"This is the largest rates increase since 1990," Growden said.
Rents were up 4.5 percent for the year, and insurance cost 12.9 percent higher.
By comparison, the price of imported goods and services - tradables - fell 0.2 percent for the quarter and by 1.6 percent for the year.
The inflation numbers were close to the Reserve Bank's (RBNZ) August forecasts, and supported the prospect of another large official cash rate cut in November.
Relief from rent costs will take time - money mentor
Bay Financial Mentors general manager Shirley McCombe told Midday Report that low, stable inflation was "great for our economy".
"I think it's great to see a drop in some of those staple food prices that were particularly impacted by Cyclone Gabrielle."
Inflation slows to lowest level in three years
It would take some time, however, before this flowed through to lower rent prices, utility costs and mortgage rates, she said.
"That's the biggest cost that most families are facing...
"I'm sure there's a lot of people breathing a sigh of relief, but that's going to take time to feed through, because people have mortgages fixed for certain periods of time."
McCombe doubted that slowing inflation would result in lower rents, as there were still "demand issues" in the market.
Some people would barely notice the change in product prices, but "if you're in a position where, once you've paid your rent, you've got only $20 or $30 to feed yourself then it's probably not going to make an enormous amount of difference to you".
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