New Zealand Inflation Hits 3% Amid Soaring Electricity and Housing Costs

This met the upper limit of the Reserve Bank of New Zealand's 1-3 per cent target band for the annual inflation rate, according to a statement of the Statistics Department, Xinhua News Agency reported.

"The 3.0 per cent annual inflation rate in the September 2025 quarter is the highest since the June 2024 quarter, when it was 3.3 per cent," Stats NZ prices and deflators spokesperson Nicola Growden said.

The largest contributors to the annual inflation rate were all in the housing and household utilities group, led by power, rent, and local authority rates, with the top three contributors making up around 17 per cent of the weight in the basket of New Zealand's consumer price index, Stats NZ said.

Electricity prices jumped 11.3 per cent over the year, the largest annual gain since the March 1989 quarter when they rose 12.8 per cent, statistics show.

"Annual electricity increases are at their highest since the late 1980s, when there were several major reforms in the electricity market," Growden said.

Prices fell over the year for pharmaceuticals, telecoms equipment, and petrol, helping offset some cost pressures, Stats NZ said.

On a quarterly basis, consumer prices rose 1 per cent in the September 2025 quarter, compared with the June 2025 quarter, driven largely by higher local authority rates and a 12.2-per cent increase in vegetable prices due to seasonal factors, it said.

Acting Finance Minister Chris Bishop said expectations are for inflation to drop towards 2 per cent in the first half of 2026, easing pressure on households and businesses.

On October 16, Stats NZ reported that food prices in New Zealand rose 4.1 per cent in the 12 months to September 2025, marking the smallest annual increase since April this year.

The grocery food group contributed most to the rise, up 3.9 per cent annually, according to the Statistics Department statement.

Key staples saw significant annual price hikes: white bread increased 49.6 per cent; cheese rose 31.4 per cent; butter climbed 28.9 per cent; and milk was up 15.1 per cent, Stats NZ said.

Vegetables also increased by 5.2 per cent annually, with cabbage nearly doubling in price from September 2024 to September 2025, the highest in nearly three years, and lettuce was up 55 per cent, it said.

"All five food groups continue to grow annually, but the rate of increase for overall food prices has slowed this month," Growden said.

However, monthly food prices fell 0.4 per cent in September compared with August, driven by price drops in vegetables and chocolate, marking the first monthly decline since February 2025, statistics show.

- IANS