The cost of living for Kiwi households rose by 7.7% in the 12 months to March 2023, according to Stats NZ.
A 12% increase in food costs plus a 38% increase in mortgage interest costs were key components in pushing up the costs for households. The food increases included higher grocery food, fruit and vegetable prices.
These figures are according to Stats NZ's latest household living-costs price indexes (HLPIs).
The living costs indexes 7.7% increase is considerably higher than the Consumers Price Index (CPI) inflation figure for the March year that came out as 6.7%.
In terms of quarterly increases, the HLPIs rose by 1.8%, which compared with a quarterly CPI increase of 1.2%.
A major difference between the HLPIs and the CPI is that the CPI includes the cost of building a new house (which rose 11% in the year to March), while the HLPIs instead includes mortgage interest payments - which as stated increased by 38%.
In fact that 38% figure is down somewhat from the figure for the year to December 2022, when the increase totalled 45%, while the increase in overall living costs during that period came in at 8.2%.
The household living-costs price indexes measure how inflation affects 13 different household groups, plus an all-households group, while the consumers price index (CPI) measures how inflation affects New Zealand as a whole.
Stats NZ says the two measures of inflation are typically used for different purposes. A key use of the CPI is monetary policy (through the Reserve Bank and its use of the Official Cash Rate to help control inflation), while the HLPIs is to provide insight into the cost of living for different household groups.
On the food price increases, Stats NZ's consumer prices manager James Mitchell said these had increased by 12% for the average household, "which was the main contributor for most household groups".
In terms of the groups covered by the indexes, Stats NZ gave these figures for the increases during the 12 months to March 2023:
- all households 7.7%
- beneficiary 6.7%
- Māori 7.5%
- superannuitant 7.1%
- highest-spending households 8.7%
- lowest-spending households 6.9%.
*We also spoke with Bill Rosenberg in a recent episode of the Of Interest podcast about the HLPIs v the CPI.
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