The cost of living for the average household in New Zealand increased by 7.7 per cent year on year, with increasing prices widely felt across all household groups in the September 2022 quarter, the country’s statistic department said on Wednesday.
The cost of living for the average household increased by 7.7 per cent in the September 2022 quarter when compared with the September 2021 quarter, Xinhua news agency reported citing Stats NZ as saying.
All household groups faced their highest annual cost-of-living increase since the series began in 2008, it said.
“Higher prices for housing and food were the main contributors to the increase across all the household groups,” consumer prices manager Katrina Dewbery said in a statement.
Each quarter, the household living-costs price indexes (HLPIs) measure how inflation affects 13 different household groups, plus an all-households group, or the average household.
The consumers price index (CPI) measures how inflation affects New Zealand as a whole.
Annual inflation, as measured by the CPI, was 7.2 per cent in the September 2022 quarter, while annual inflation for the average household as measured by the HLPIs was 7.7 per cent, statistics showed.
These two measures of inflation are typically used for different purposes. A key use of the CPI is monetary policy, while the focus of the HLPIs is to provide insight into the cost of living for different household groups, Dewbery said.
One important difference between the two is the treatment of housing. The CPI captures the cost of building a new home, while the HLPIs capture mortgage interest payments, she said.
In the HLPIs, interest payments increased by 39 per cent for the average household in the year to September 2022. In the CPI, the cost of building a new home increased by 17 per cent in the same period, statistics showed.
Dewbery said the official cash rate, used by the Reserve Bank to control inflation, increased from 0.25 per cent in September 2021 to 3.0 per cent in September 2022, which was reflected in the HLPIs by higher costs for interest payments.
About 7.4 per cent of expenditure for higher spending households is on interest payments. This compares with 4.7 per cent for the average household and 2 per cent for the lowest-spending households group. This means highest-spending households experience the higher interest rates more than other household groups, she said.
Petrol prices were another contributor to the rise for most household groups, increasing by 19 per cent for the average household when compared with the same quarter last year, statistics showed.