A recent report by Stats NZ reveals a significant surge in the cost of living for New Zealand households, recording a 7.4% increase in the 12 months leading up to the September 2023 quarter. This follows a 7.2% rise in the preceding 12 months.
Factors Driving the Increase
The surge in living costs was attributed to several key factors, with interest payments experiencing a substantial hike of 27.3%. Grocery food costs also contributed, rising by 11.1%. Rent, insurance, and property rates and related services witnessed increases of 5.0%, 12.9%, and 9.6%, respectively.
Comparison with CPI
The report highlighted that while the Consumer Price Index (CPI) showed a decrease in inflation over the same period, the household living-costs measure considers additional ongoing expenses, such as the 27% increase in interest rates for the average household in the past 12 months.
Impact on Household Groups
The rise in living costs affected various household groups differently:
- Average Household: Experienced a 7.4% increase in living costs.
- Beneficiaries: Faced a 6.7% rise, with notable impacts from increased rent, grocery food, and interest payments.
- Māori Households: Recorded a 7.4% increase, mainly driven by higher costs in food and housing.
- Superannuitant Households: Saw a 6.7% increase, with grocery food, housing, and housing-related costs being primary contributors.
- Highest-Spending Households: Witnessed a 7.7% increase, primarily due to higher interest payments.
- Lowest-Spending Households: Experienced a 7.2% rise, with significant impacts from increased grocery food, rent, and property rates.
Caution on Experimental Statistics
Stats NZ emphasized that these statistics are experimental, with ongoing method development. The report also cautioned that factors like the removal of the $5 charge on prescriptions contributed to lower prices for medical products, impacting all household groups.
The insights provided by this report shed light on the economic challenges faced by New Zealand households, prompting a closer examination of policy measures to alleviate the growing financial strain on various segments of the population.
https://www.stats.govt.nz/news/household-living-costs-increase-7-4-percent/