Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ consumer prices unexpectedly rise in December quarter

NZ consumer prices unexpectedly rise in December quarter on more expensive airfares, housing

By Paul McBeth

Jan. 21 (BusinessDesk) - New Zealand inflation unexpectedly edged higher in the final three months of 2013, led by more expensive airfares, housing and dairy prices.

The consumers price index increased 0.1 percent in the three months ended Dec. 31, slowing from a quarterly increase of 0.9 percent, according to Statistics New Zealand. That was against a forecast decline of 0.1 percent in a Reuters survey of economists and the Reserve Bank’s expectation of a 0.2 percent fall. The annual pace of inflation was 1.6 percent, its fastest pace since March 2012 and slightly ahead of forecasts.

The increase was underpinned by a 12 percent rise in the price of international airfares, the biggest quarterly gain in four years, and a 6.7 percent increase in domestic flights.

“International airfares usually rise in December quarters,” prices manager Chris Pike said in a statement. “This quarter’s rise reflects seasonally higher air fares to Asia and Europe.”

Prices for housing and household utilities rose 0.5 percent with a 1.1 percent rise in the cost of new housing and a 1.6 percent increase in property maintenance services. Prices for milk cheese and eggs advanced 4.2 percent in the quarter.

Those were offset by a 20 percent drop in the price of vegetables and a 3.5 percent decline in the price of petrol.

Investors were awaiting the release of today’s data with the Reserve Bank scheduled to review monetary policy next week. Governor Graeme Wheeler had previously indicated he will start hiking the 2.5 percent official cash rate this year to head off the threat of future inflation as the Auckland and Christchurch property markets continue to bubble and as the Canterbury rebuild gathers momentum.

Before the release, traders were betting the Reserve Bank will hike interest rates by 109 basis points over the coming year, according to the Overnight Index Swap curve, and economists had been pencilling in March as the likely date for Wheeler to start tightening policy.

Tradable inflation, which includes goods and services facing international competition, shrank 0.5 percent for an annual decline of 0.3 percent. Non-tradable inflation rose a quarterly 0.5 percent for an annual pace of 2.9 percent, its fastest pace since September 2011.

The annual pace of inflation, which stayed in the Reserve Bank’s target band of between 1 percent and 3 percent, was driven by a 3.2 percent increase in housing and household utilities, with a 4.7 percent increase in new housing prices, a 2.1 percent rise in rental prices, 4.3 percent increase in property maintenance, and a 3 percent rise in electricity prices. Petrol prices for an annual 0.9 percent

Prices for clothing and footwear fell an annual 1.4 percent, led by cheaper women’s clothing, clothing accessories and men’s footwear, and 2.8 percent decline in the annual price of communications was led by a 21 percent slide in prices for telecommunication equipment.

The level of discounting in the quarter was unchanged at 15 percent of prices discounted from the September period.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news