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Highlights
- All Kiwi household groups are feeling the pinch of the rising cost of living.
- According to Stats NZ, New Zealand households faced the highest inflation since 2008.
- Higher prices of food and living are impacting households the most.
The impact of increasing prices was widely felt by all Kiwi household groups in the September quarter of 2022, said Stats NZ in its report released recently (26 October 2022).
The survey revealed that compared with the September 2021 quarter the cost of living for an average household, as measured by the household living costs prices index (HLPI), increased by 7.7% in the current September quarter.
According to the report, different household groups in New Zealand (NZ) faced their highest or a near-equal annual cost of living since 2008.
Cost of living for different households
- All households: 7.7%
- Beneficiary: 6.5%
- Māori: 7.7%
- Superannuitant: 6.8%
- Highest spending households: 8.8%
- Lowest spending households: 6.5%
The main reasons for the households experiencing higher inflation were higher prices of housing and food, as per Katrina Dewberry, the consumer prices manager.
The survey also pointed out that each quarter, the HLPI measures how inflation affects different household groups. The difference between the consumer price index (CPI) and the HLPI is that while the CPI measures how inflation affects NZ as a whole, the HLPI measures inflation for household groups.
The annual inflation as measured by the CPI was 7.2% in September 2022 and the inflation for the average household as measured by the HLPI was 7.7%. While the CPI is a major monetary policy decision tool, the HLPI gives an insight into which household type is the worst impacted by inflation.
It estimates the cost of living, which includes mortgage payments, and does not include the cost of constructing new houses in its calculations.
Lowest-spending households
The survey also stated that the annual inflation for the lowest spending households was 6.5% and it was mainly driven by higher prices for rent and petrol, interest payments, groceries, food and fruits, and vegetables.
A substantial amount went towards the rent for these households. Therefore, when housing prices are high, they feel the maximum pinch.