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Global petrol, food prices push CPI higher

Hon Dr Michael Cullen
Minister of Finance

21 October 2008

Global petrol, food prices push CPI higher

Statistics New Zealand this morning confirmed forecasts by the Treasury and private sector economists on the level of consumer price inflation in New Zealand in the September Quarter, Finance Minister Michael Cullen said today.

"The past 18 months or so have seen dramatic increases in global prices for oil and other commodities feed directly through into higher retail prices for petrol and food here in New Zealand," Dr Cullen said.

"These challenging times for the world economy have put significant stress on household budgets, which is why the government in its May Budget unveiled a three-phase personal tax cut package and increased Working for Families entitlements from 1 October 1, 2008, bringing forward adjustment for inflation to the Family Tax Credit and income abatement threshold that were originally to occur from 1 April 2009," he said.

Dr Cullen said that economists anticipate that the rate of consumer price inflation will moderate significantly in the year ahead as global commodity prices, including for oil, have dropped well below their recent peaks.

The Consumers Price Index released by Statistics New Zealand today showed a 1.5 per cent increase in consumer prices over the September quarter, taking the annual inflation rate to 5.1 per cent. Excluding the impact of global petrol prices, the annual inflation rate would have been 3.7%.

New Zealand's annual inflation rate of 5.1% in the September quarter is comparable with figures in the United States and the United Kingdom who had annual increases in the September month of 4.9% and 5.2% respectively.

ENDS


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