Inflation has increased to a 12-month high of 2.7%, according to official figures out from Stats NZ today.
The increase in the 12 months to the June quarter followed a 2.5% increase in the 12 months to the March 2025 quarter.
“Although the annual inflation rate increased from the March 2025 quarter, it remains within the Reserve Bank of New Zealand’s target band of 1 to 3% – the fourth consecutive quarter it has done so,” Stats NZ prices and deflators spokesperson Nicola Growden said.
The largest contributor to annual inflation was local authority rates and payments, up 12.2%.
Growden said rates contributed 13% of the 2.7% annual increase and were captured yearly in the September quarter.
“The 12.2% annual increase for rates was captured in the September 2024 quarter. Next quarter we will capture changes in rates as of 1 July 2025.”
Petrol prices made a “significant downward contribution” to inflation, she said, with a decrease of 8%.
“The CPI excluding petrol increased 3.2% in the 12 months to June 2025.”
The average price for one litre of 91 octane fuel was $2.54 in the June 2025 quarter, down from $2.76 in the June 2024 quarter.
Rent prices also increased, up 3.2% in the 12 months to the June 2025 quarter, and contributing 13% to the 2.7% inflation increase.
“The 3.2% increase in rents is the smallest annual increase in four years. Rents increased 2.9% in the 12 months to June 2021.”
Inflation remains ‘under control’ – Willis
Finance Minister Nicola Willis said inflation “remained under control” and within the Reserve Bank’s target range.
“It’s the fourth consecutive quarter inflation has remained within the target range – a stark contrast to under the previous government, where inflation raged on unchecked, reaching 7.3% in 2022.”
While it was “pleasing” to see non-tradeables inflation continue to fall, she said the effect of council rates on inflation was a “concern”.
“That’s why this Government has also been clear in its call to councils to focus on the basics and keep rates under control. We look forward to councils taking heed of this and playing their role as stewards of ratepayers’ money better in the future.”
Willis added that external pressures on inflation remained and that the country “must remain cautious”.
“It’s a reminder that the economic recovery is not to be taken for granted.”
‘Failing by its own standards’: Opposition hits out at Govt over inflation
The Opposition accused Prime Minister Christopher Luxon and the coalition Government of “making excuses” and “failing by its own standards” on the back of the inflation increase.
Labour’s finance spokesperson Barbara Edmonds said the figures released today showed the cost of living crisis was “getting worse under National”.
“Christopher Luxon promised to make the cost of living better, instead, he’s making it worse, He has been making excuses for 18 months now. People are sick of it.”
She accused Luxon of being “completely out of touch” with the needs of middle New Zealand.
“Food prices are surging with butter up nearly 50%. Rates are up over 12%, electricity is up over 8%, and everyday costs continue to rise, yet this Government keeps siding with property speculators and fossil fuel companies while families are left behind.”
Green Party co-leader Chlöe Swarbrick said the inflation numbers exposed a “government failing by its own standards while our most vulnerable pay the price”.
“Luxon’s Government is cutting investment and creating the conditions for severe unemployment, shredding the social safety net, pushing thousands into poverty, and then punishing them for it.”
