Low-spending households continue to face highest inflation

Press Release – Statistics New Zealand

Low-spending households faced the highest inflation for the year (up 2.4 percent), and high-spending households the lowest (up 1.3 percent), Stats NZ said today.Low-spending households faced the highest inflation for the year (up 2.4 percent), and high-spending households the lowest (up 1.3 percent), Stats NZ said today.

Price increases for petrol, rent, and insurance contributed to inflation for low-spenders.

“Inflation for big spenders was kept lower due to price falls for luxury items, such as specials on new cars,” consumer prices manager Geoffrey Wong said. “Lower retail prices and continued quality improvements to telecommunications services have also been more beneficial for those with extra money to spend.”

The cost of living for beneficiaries was also up 2.4 percent in the year. Higher price for rents had the greatest impact on this group (up 2.3 percent).

Superannuitants experienced the greatest impact from increasing prices for dwelling insurance and local authority rates, driving their 2.1 percent overall increase in the year to December.

Rising transport costs impact high spenders

Higher transport costs had a greater effect on big spenders in the December 2017 quarter. Their overall costs rose 0.3 percent, compared with 0.2 percent experienced by all households.

Seasonal rises in prices for international airfares had the greatest effect on transport costs for this group, followed by petrol prices. All HLPI groups experienced some impact from rising petrol prices in December (up 6.2 percent across groups).

Households with lower income and expenditure received greater benefit from seasonal falls in vegetable prices (down 18.5 percent across HLPI groups), with lower prices for items such as tomatoes, cucumbers, and lettuce.

The relative importance of items for each household group has changed in the December 2017 quarter as a result of the 2017 CPI review. See Household living-costs price indexes review: 2017 for more information about the effect of the CPI review.

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