Inflation Rate Low in the March Quarter Mainly Due to Low Petrol Prices
Inflation increased a little in the quarter that ended in March as cheaper fuel prices were balanced with higher cigarette prices.
In the first quarter of the year, the Consumers Price Index increased 0.2 percent overturning the decline of the earlier quarter's 0.5 percent.
Matt Haigh, consumer price manager of Statistics New Zealand said that there was an increase in the prices for newly constructed homes, cigarettes, rent and food in the first three months of the year. On the other hand petrol prices and air fares dropped. Excluding tobacco and cigarettes the inflation in fact dropped 0.1 percent in the first quarter.
In January after an increase excise duty, the price of tobacco and cigarettes scaled 9.4 percent. Mr Haigh said, "The average price of a pack of 25 cigarettes was $28.79 in the March 2016 quarter, more than double the price from six years ago when annual 10 percent excise tax increases were introduced."
There was 7.7 percent drop in petrol prices, marking the biggest descent contribution in Q1.
The lower air fare resulted from the cheaper fuel prices and growing competition in the industry. International airfares dropped twelve percent and the domestic airfares decreased 4.8 percent.
The annual rate of inflation increased 0.4 percent, mostly pushed by higher rents and costs of construction. Last year in the December inflation increased was only 0.1 percent. It marked the lowest annual inflation rate since 1999.
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