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Petrol prices push New Zealand consumer inflation near zero

Xinhua, January 20, 2016 Adjust font size:

Consumer inflation in New Zealand last year was the lowest in 16 years, the government statistics agency said Wednesday.

The consumers price index (CPI) rose by 0.1 percent in 2015, following a 0.4 percent increase in the year to the September 2015 quarter, according to Statistics New Zealand.

The previous smallest annual movement was a 0.5-percent fall in the year to September 1999.

Petrol prices, which fell by 8.1 percent, were the main driver of low inflation, while lower vehicle taxes and international air fares also contributed.

Excluding petrol, the CPI showed a 0.5-percent increase, said a statement from the agency.

Housing and household utility prices were up 2.8 percent in the year.

The CPI fell 0.5 percent in the December 2015 quarter, due to seasonally lower vegetable prices and seasonal discounting, but it was the largest quarterly fall since December 2008.

The figures will likely raise expectations that the Reserve Bank of New Zealand (RBNZ) will further cut interest rates.

The RBNZ cut the official cash rate to 2.5 percent last month, as inflation continued to track below its target band of 1 percent to 3 percent.

Although the RBNZ forecast inflation would return to the target band in the first half of this year, some analysts are expecting two further cuts - each of 25 basis points - to the official cash rate this year. Endit