Annual inflation fell to 3.3 per cent in the June quarter.

In the June quarter, inflation was 0.4%, according to figures from Stats NZ today.

The 3.3% annual increase reported today follows a 4% increase in the 12 months to the March 2024 quarter.

“The 3.3% annual price increase is below what was seen during the peak in 2022, and is similar to three years ago,” Stats NZ consumers prices senior manager Nicola Growden said.

The Reserve Bank of New Zealand’s target range for consumer inflation is between 1 and 3%.

Rental prices and rates were still a sticking point.

Rent prices increased 4.8% in the 12 months to the June 2024 quarter. And new house construction costs and council rates increased 3% and 9.6% respectively.

That made housing and household utilities the largest contributor to the annual inflation rate.

A big bump in insurance costs also drove inflation. Prices for insurance increased 14% in the 12 months to the June 2024 quarter.

That was nearly double the rate back in June 2009, which was the previous highest peak in the series, Growden said.

Countering that was deflation in recreation and culture.

Accommodation deflation

Stats NZ recorded a 4.5% decrease for accommodation services and a 3.4% decrease for other recreational equipment and supplies prices, such as video games and pet related products.

Non-tradeable inflation was 5.4% in the 12 months to the June 2024 quarter (compared with 5.8% in the 12 months to the March 2024 quarter), driven by prices for rent, insurance, cigarettes and tobacco.

Non-tradeable inflation measured final goods and services that did not face foreign competition and indicated domestic demand and supply conditions.

But foreign competition could influence the inputs of these goods and services.

Tradeable inflation was 0.3% in the 12 months to the June 2024 quarter. That was well down from 1.6% in the year to March 31.

Stats NZ recorded higher prices for petrol, accommodation services, and grocery food.

But lower prices for fruit and vegetables partly offset that, as did cheaper passenger transport services.

The data could provide some clues about the likelihood of interest rate cuts later this year.

Last week, the Reserve Bank shifted the tone of its language, expressing confidence inflation would move back inside its mandated 1-3% range before the end of the year.

Economists had expected another fall in the topline Consumer Price Index (CPI) number.

ANZ and ASB picked a 0.4% quarterly rise, for an annual figure of 3.3%. Kiwibank picked 3.4%.

Westpac took a more cautious line, picking 0.6% and 3.5% for the year.

That was closer to the RBNZ’s pick (3.6%) when it delivered its last set of forecasts in its May Monetary Policy Statement.

“We are increasingly comfortable that sub-3% inflation will be achieved in the second half of 2024 and that conditions are in place that will sustain 1-3% inflation,” ASB senior economist Mark Smith said.

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.