This 7.6-percent increase occurred shortly after the Reserve Bank of New Zealand Act 1989. The Act came into effect in February 1990 to target the high inflation from the previous decade and maintain stability in the general level of prices over the medium term, Stats NZ said.
"New Zealand is not alone, with many other Organization for Economic Cooperation and Development (OECD) countries experiencing higher inflation than in recent decades," consumer prices senior manager Aaron Beck said in a statement.
Price increases were widespread with 10 out of 11 main groups in the CPI basket increasing in the year, with only the communications group decreasing, Beck said.
The main driver for annual inflation was the housing and household utilities group, with prices for construction and rentals for housing increasing in the year to the December 2021 quarter, he said, adding that prices for construction of new dwellings jumped 16 percent in the December 2021 quarter compared with the December 2020 quarter.
"Construction firms have been experiencing supply-chain issues, higher labor costs, and also higher demand, which have pushed up the cost of building new houses," Beck said, noting the inflation rate for construction prices has been much higher in 2021 than previous years.
The next largest contributor to annual inflation was from the transport group, with increased prices for petrol and second-hand cars, he said. Petrol prices increased 30 percent in the year to December 2021 quarter.
"Fuel prices reached pre-COVID levels early in 2021 and have continued rising to record high prices," Beck said.
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