Kiwis heeding to calls to see their backyard amid Covid-19 international travel restrictions, and a drop in vegetable prices, has seen inflation remain steady.
Consumer price index (CPI) figures for the three months to December last year were released today by Stats NZ, showing a 0.5 per cent increase.
The CPI calculates the price of a common “representative” basket of goods and services people typically purchase, as a way to measure the impact of inflation on households. The CPI influences interest rates and is used to calculate changes to benefit payments.
Meanwhile, annual inflation has remained at 1.4 per cent, within the Reserve Bank's target range of between 1.0 to 3.0 per cent.
Prices senior manager Aaron Beck said spending on accommodation on domestic trips, which went up 20 per cent in the quarter, was the top contributor to household spending.
Annually, prices for accommodation like hotels, motels, caravan parks and Airbnbs increased 6.2 per cent, he said.
“We saw lower price levels for domestic accommodation in the June and September 2020 quarters, which coincided with a campaign to increase domestic tourism after Covid-19 lockdowns," Beck said.
“The December 2020 quarter seasonal price rise, which took prices to near normal levels, therefore resulted in a larger than usual percentage change movement.”
Beck said international travel restrictions also meant Kiwis were more likely to upgrade cars, furniture and electronics. All of these items saw price rises in the December quarter because of increased demand and decreased supply.
Also driving up prices is the introduction of quarantine-free travel to Australia, which saw increased prices for the Auckland to Sydney route. The route accounted for nearly 0.1 per cent of the 0.5 per cent increase in the CPI.
Used car prices also went up 4.6 per cent in the quarter, the largest quarterly rise since the December 1997 quarter.
Prices for beds, TVs, and cellphones are also up, Beck said.
Vegetable prices are down 22 per cent in the quarter, with seasonal falls in tomatoes, lettuce, cucumber, and capsicums.
Despite falls in vegetable prices in the December quarter, they were higher than this time last year after many reached record high prices over winter, Beck said.
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