Data released by Statistics New Zealand today shows that annual inflation was 3.3%, falling from by nearly half from a year ago (6% - June 2023).

“This fall in inflation is welcome, but it is being driven by international factors rather than domestic actions. There are also costs for working people that continue to increase rapidly,” said NZCTU Economist Craig Renney.

“This data is also weaker than expected – suggesting problems within the wider economy. It supports other data which implies that we might be heading back into falls in economic output.

“The falls in inflation were driven by reductions in the price of food, particularly fruit and vegetables. There are also falls in the price of furniture, household appliances, and the cost of second-hand vehicles. This data suggests a lack of demand in the economy and a lack of consumer confidence. There were also falls in IT equipment and international airfares – again suggesting that demand for these discretionary goods may be falling.

“Meanwhile, pricing for rents continues to increase rapidly – rising 4.8% annually. This is the fastest rate of growth for 17 years, which is as far back as the data goes. Local Authority Rates increased 9.8%. Insurance prices increased 14% annually, led by growth in property insurance (24%) and car insurance (24%). Petrol prices rose 14.7%. These are costs that are very difficult to avoid, and so will be hitting working people in their pocket.

“This data will be welcomed by those looking for interest rates to fall. But they also suggest that economic growth is stalling, and that action is needed now to support employment and household incomes. The cuts in investment set out by the Government at the recent Budget are likely to exacerbate this problem even further,” said Renney.

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