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Published: Thursday October 15, 2009 MYT 7:33:00 AM

NZ said Thursday annual inflation rate was down to 1.7%


WELLINGTON: New Zealand's inflation rate rose an unexpectedly strong 1.3 percent in the September quarter, taking the annual rate to 1.7 percent, new data showed Thursday.

The annual inflation rate has fallen from an 18-year high of 5.1 percent in the quarter ended Sept. 30, 2008, Statistics New Zealand said.

The annual rise was the lowest in 5-1/2 years, but it surprised economists who had picked prices to lift 0.8 percent in the quarter and 1.2 percent for the year.

The government-funded statistics agency's prices manager Chris Pike said the September quarter price spike was driven by higher food costs, international airfares and by government levy, excise and tax rises that occur at this time each year.

Food prices were up 1.7 percent in the third quarter, driven by higher vegetable prices, while international air transport was up 11 percent in the same period, rising from historically low levels in the June 2009 quarter.

The 1.3 percent rise in the September quarter followed rises of 0.6 percent and 0.3 percent in the June and March quarters respectively, and a fall of 0.5 percent in the December quarter, Pike said.

In the year ended Sept. 30, domestic food prices rose 5.4 percent, accounting for well over half the annual consumer price index increase of 1.7 percent.

Falling gasoline prices and air fares contributed to the lower annual increase, partly offsetting higher prices for food, electricity, and local authority rates, Pike said.

Transport prices fell 5.5 percent during the year with gasoline down 19 percent, international air transport down 15.1 percent, and diesel down 38.8 percent. - AP


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