21 Apr 2022

Cost of living rises: Annual inflation hits 6.9 percent - highest in three decades

1:51 pm on 21 April 2022

Inflation has hit its highest level in three decades.


The consumer price index rose 1.8 percent in the three months ended March driven by fuel, food, and housing costs.

The annual inflation rate was 6.9 percent below expectations.

StatsNZ released its first-quarter Consumer Price Index (CPI) data this morning.

Food prices were 7.6 percent higher in March than the year before - the biggest annual increase in more than a decade.

Consumer prices rose 1.4 percent in the three months ended December, taking the annual rate to 5.9 percent.

Prior to that the highest rate was 7.6 percent in the June 1990 quarter.

Finance Minister Grant Robertson said significant prices increases for food and fuel were hitting all nations, citing record high inflation in the likes of the US and the UK. He said the closure of Chinese ports, was contributing to supply chain disruption.

Robertson said while he acknowledged the pressures on many families, the broader economy was in good shape, with low unemployment and exports and economic growth rising.

The Reserve Bank stepped up its fight against inflation last week with a 50 basis point lift to the official cash rate - the fourth rise in a row, with a clear signal of more to come.

ANZ is expecting the Reserve Bank to lift the Official Cash Rate by another 50 points next month with more increases during this year.

Economists had been predicting about a 7 percent lift for the annual rate.

More detail on inflation figures

The quarterly figure for food was up 3.1 percent, led by a 9.3 percent rise in fruit and vegetables (17 percent annual) and a 2.4 percent increase for grocery foods.

The quarterly figures for fruit were the largest, up 12 percent, with vegetables up 7.3 percent and meat and poultry up 3.8 percent.

Housing also played a significant part, with inflation from home ownership up 18 percent for the year, and 3.5 percent for the quarter.

The total increase from housing and household utilities was 8.6 percent for the year, and 1.8 percent for the quarter. Housing was the largest contributor to annual inflation figures.

Inflation from the transport sector was the second highest contributor to annual inflation, up 3.3 percent for the quarter and 14 percent on the previous year, mostly thanks to increases in fuel prices.

Fuel costs rose 32 percent for the year and 8.8 percent for the quarter, with the average price of a litre of 91 petrol rising from $2.45 to $2.67 between December and March.

Get the RNZ app

for ad-free news and current affairs