Stats NZ revises up third-quarter inflation

Monday 07 November 2016 11:26 AM

Stats NZ revises up third-quarter inflation after underestimating ACC car licensing fees

By Paul McBeth

Nov. 7 (BusinessDesk) - New Zealand's consumer prices rose at a faster pace than reported in the September quarter, with Statistics New Zealand discovering it mucked up the way it calculated Accident Compensation Corp's motor vehicle licensing fees in the period.

The consumers price index rose 0.3 percent in the three months ended Sept. 30, ahead of the 0.2 percent pace originally reported on Oct. 18, which was itself above Reserve Bank expectations for a 0.1 percent increase. The annual pace was revised up to 0.4 percent, twice the 0.2 percent annual pace reported last month, and closer to the bottom of the RBNZ's 1 percent-to-3 percent target band.

"The changes were required to correct a manual processing error discovered by Statistics NZ. The error affected prices for vehicle relicensing fees, within the transport group," the government department said in a statement. "Statistics NZ is confident that the correction only affects the September 2016 quarter index numbers, as it occurred in our measurement of lower ACC levies for light vehicles that came into effect during the quarter."

The government department has already told the Reserve Bank ahead of this week's monetary policy statement and the Treasury, which is preparing the half-year economic and fiscal update.

"Following our protocols for errors, Statistics NZ has decided to correct the CPI now to ensure our customers have the best possible information to inform their decisions," it said.

The revision means prices for the transport sector shrank 1.9 percent in the quarter, not the 3 percent originally report, for an annual decline of 5.6 percent as opposed to 6.7 percent. The transport sector was the biggest drag on prices in the quarter due largely to the reduction in vehicle relicensing fees that kicked in on July 31. Cheap petrol and new and used cars have also been weighing on the sector.

(BusinessDesk)

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