New Zealand’s CPI reading for 2018’s third quarter came in higher than markets had anticipated, with the q/q figure printing at 0.9% (forecast 0.7%, last 0.4%) and the annualized CPI ticking into 1.9% (forecast 1.7%, last 1.5%), sending the NZD/USD kicking into 0.6560 on reaction.
Key highlights (via Stats NZ)
The consumers price index (CPI) increased 1.9 percent in the September 2018 year, driven by higher petrol prices, Stats NZ said today. “Petrol prices increased 19 percent in the September 2018 year,” prices senior manager Paul Pascoe said. “This is the highest annual increase since June 2011.”
“While petrol only makes up about 4 percent of the CPI, it can have a large impact on overall inflation,” Mr Pascoe said. “It contributed about 30 percent to the quarterly CPI movement for September, and about 40 percent to the annual movement.”
This is the first time petrol prices have risen for four consecutive quarters since September 2008, during the global financial crisis.
The falling exchange rate, which makes imports more expensive for New Zealanders, also contributed to a 2.6 percent rise in the price of audio-visual equipment such as televisions, cameras, and home theatre systems in the September 2018 quarter. This is the first quarterly rise for audio-visual equipment since September 2016, as quality adjustments generally cause price falls for these goods.
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