1 May 2023

New cost of living figures show who it's hitting hardest

1:53 pm on 1 May 2023
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All groups were hit by rising food prices. Photo: 123RF

The cost of living has risen 7.7 percent in the past year, new figures show, with high-spending households hit hardest thanks to rising interest rates.

But the rate of inflation appears to be easing, down from 8.2 percent in the 12 months to December 2022.

Stats NZ's household living costs price indexes measure how changing prices affect different households, such as beneficiaries, superannuitants, Māori and different income and spending levels.

While the average increase was 7.7 percent, for the lowest-spending households inflation was just 6.9 percent, and for beneficiaries, 6.7 percent.

"This was due to higher prices for rent, interest payments, grocery food, such as eggs and cheese, and fruit and vegetables," Stats NZ consumer prices manager James Mitchell said.

But for the highest-spending households, inflation over the year to March was 8.7 percent - driven by a massive increase of 38 percent in interest payments.

"Highest-spending households spend proportionally more on interest payments than other household groups."

All groups were hit by rising food prices - 12 percent, with fruit and vegetables up a whopping 21 percent.

Māori households and the lowest-spending households bore the brunt of higher food prices - fruit and vegetables prices alone jumped by 21 percent for both groups and grocery prices increased 12 and 13 percent respectively.

Superannuitants were also hit by rising airfares, Stats NZ said. Overall, they faced a 7.1 percent rise in costs.

"Superannuitants are more likely to own their own home, and own without a mortgage, than other household groups," Stats NZ consumer prices manager James Mitchell said.

"They are less impacted by rising mortgage interest rates than other household groups."

For beneficiary households, rent made up about a third of household expenditure, Mitchell said, compared to 13 percent for the average household, and 5 percent for highest spending households.

The official rate of inflation overall, as measured in the consumer price index, was up 6.7 percent in the 12 months to March.

Until interest rates started rising in 2021, data showed inflation for higher-spending groups had typically been lower than others.

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