Inflation down to 1.7%

Inflation over the last quarter was flat and the annual rate has dropped from a recent high of 2.2% to 1.7%.

RNZ: Inflation slows to 1.7 percent

The consumer price index (CPI) was flat in the three months ended June, slowing the annual inflation rate to 1.7 percent from 2.2 percent, Statistics NZ said.

A fall in fuel costs and airfares offset higher prices for household basics such as food, rent, and power, while the housing boom lifted the price of a new house.

One of the main drivers of the lower annual rate was cheaper telecommunications products and services.

The relative strength of the New Zealand dollar also helped dampen inflation by making imported goods cheaper.

Housing rentals rose slightly (up 0.4 percent), held down by a 1.6 percent fall for Canterbury.

Prices for newly-built houses, excluding land, rose 1.8 percent this quarter.

Seasonally lower domestic airfares (down 14.5 percent), lower petrol prices (down 1.9 percent or and average 4 cents a litre), and seasonally lower prices for car rentals contributed most to a drop in overall transport costs.

Higher vegetables prices pushed food inflation up 0.7 percent in the June 2017 quarter to 2 percent for the June 2017 year. Vegetables prices rose 19 percent for the year, with higher prices for lettuce, kumara, and broccoli.

The inflation numbers were below market expectations and Westpac acting chief economist Michael Gordon said that would dampen any notion of interest rate rises by the Reserve Bank in the foreseeable future.

Good news for people with mortgages and other types of loans.

Lack of wage growth is not so good for wage earners.

Inflation since 1990:

  http://www.rbnz.govt.nz/statistics/key-graphs/key-graph-inflation

8 Comments

  1. Gezza

     /  July 19, 2017

    That’s no good to me. Money on term deposits. Hope it rises again in 11 months time.

    • David

       /  July 19, 2017

      The makes no sense. Inflation is what kills the value of term deposits.

      • Gezza

         /  July 19, 2017

        Cuts me income. Never cuts the fucken rates or the powerco rapists.

    • look at peer to peer lending G…..something like squirrel money maybe. suggestion only take proper advice..

      • Gezza

         /  July 21, 2017

        Well, when you haven’t got a lot to play with dave, risking what you have & having to constantly monitor it is a worry & seems like a lot of work for someone not dedicating heaps of time to it.. Who would be best to provide proper advice & how do you establish who you can trust? Thinking of one recent case where a trusted advisor, subsequently convicted, lost his clients money. Name escapes me for the moment.

        • True its hard to know who to trust. All you can do is ask around and see if any adviser names [good and bad] come up regularly.
          I just do my own thing and trust myself – so when it goes bad its down to me!

          • Gezza

             /  July 21, 2017

            I think you might have rather more than me to play with dave. 😀

            I know you’ve put the effort in over the years to get good at this game but I think you might have something of a natural talent in this area as well.

            I’m not sure you always get my admittedly sometimes off the wall sense of humour, but I always read your stuff here dave, because it’s generally well-reasoned & I appreciate that you take the time to elaborate & answer questions.