The cost of living is rising at its slowest rate in more than a decade.
Annual inflation, as measured by Statistics New Zealand's Consumers Price Index, was 1% at the end of June, the smallest increase since 1999.
Inflation peaked at more than 5% in the middle of last year.
Cheaper broadband and televisions were the biggest price falls, while housing and utilities rose faster than inflation during the year.
Prices rose 0.3% in the latest three month period, due mainly to higher housing and electricity prices.
Power prices, reflecting higher lines charges being passed through to customers, rose 4.5% in the June quarter.
Housing costs also rose faster than the overall inflation rate in the quarter, driven by higher rents, particularly in Auckland.
The annual rate of inflation now sits at the bottom of the Reserve Bank's target range of 1% - 3%.
Deutshce Bank chief economist Darren Gibbs says overall demand remains subdued.
"The economy, although it is in recovery mode, is still fairly weak. There is still spare capacity in the economy and it's coming through in these figures."
He says the high dollar is also putting downward pressure on some prices.