Free New Zealand Inflation Calculator

Inflation is an increase in the general level of prices of goods and services over time. When inflation rises, each dollar you have buys fewer goods and services than before – this is called a decline in purchasing power. For example, if inflation is 3%, something that cost $100 last year would cost $103 this year. The Reserve Bank of New Zealand (RBNZ) aims to keep inflation between 1–3% because low and stable inflation supports sustainable economic growth and helps households and businesses plan for the future.

The Consumer Price Index (CPI) is New Zealand's principal measure of household inflation. It tracks the percentage change in the price of a "basket" of goods and services that New Zealand households typically buy. The CPI covers 11 major groups including Housing & Household Utilities, Food, Transport, and Recreation & Culture. Stats NZ Tatauranga Aotearoa calculates the CPI by collecting prices from retailers across 12 pricing centres throughout New Zealand. The CPI is published quarterly (every three months), with the index referenced to June 2017 quarter = 1000.

The CPI basket includes 598 items across 11 groups (following the 2024 review). The largest weights (December 2024) are: Housing & Household Utilities (29.4%), Food (18.5%), Transport (14.3%), Recreation & Culture (9.0%), and Miscellaneous (8.0%). These weights reflect how much New Zealand households spend on each category – items households spend more on have larger weights in the CPI. Stats NZ updates these weights every three years using data from the Household Economic Survey to ensure the CPI reflects current spending patterns.

The Reserve Bank of New Zealand aims to keep annual consumer price inflation between 1–3% on average, over the medium term. This target is set out in the Remit for the Monetary Policy Committee, agreed with the Minister of Finance. The RBNZ focuses on keeping inflation near the midpoint (2%) of the target range. New Zealand was the first country in the world to adopt inflation targeting in 1990, and this approach has been widely adopted globally. The target allows flexibility to look through temporary price movements while maintaining price stability.

As of the September 2025 quarter, the annual CPI inflation rate was 3.0% (up from 2.7% in June). Quarterly inflation was +1.0%, the highest in two years. The largest contributors to annual inflation were all in the Housing & Household Utilities group: Electricity (+11.3%) – the highest since March 1989; Local authority rates (+8.8%); and Rent (+2.6%). Headline inflation has fallen substantially from its peak of 7.3% in June 2022, though it is now at the top of the RBNZ's 1–3% target range.

Tradable inflation covers goods and services that are imported or in competition with foreign goods. Their prices are influenced by global supply chains, exchange rates, and international competition. In September 2025, tradable inflation was +2.2% annually. Non-tradable inflation covers goods and services that do not face foreign competition (e.g., rent, council rates, electricity, haircuts). It shows how domestic demand and supply conditions affect consumer prices. In September 2025, non-tradable inflation was +3.5% annually – more persistent due to domestic cost pressures. The RBNZ closely monitors non-tradables as a key indicator of underlying inflation.

Inflation has three main causes: 1) Demand-pull inflation – when demand for goods/services exceeds supply, allowing businesses to raise prices. 2) Cost-push inflation – when production costs rise (e.g., wages, energy, raw materials), businesses pass these on to consumers. 3) Inflation expectations – if people expect prices to rise, they may demand higher wages or raise prices preemptively, making inflation self-fulfilling. Recent New Zealand inflation was driven by global supply chain disruptions, strong post-COVID demand, high net migration, and domestic cost pressures from electricity and council rates.

The RBNZ's primary tool is the Official Cash Rate (OCR) – the interest rate on overnight loans between banks. When inflation is too high, the RBNZ raises the OCR. This makes borrowing more expensive, reducing household and business spending, which slows demand and eases price pressures. When inflation is too low or the economy needs stimulating, the RBNZ lowers the OCR to encourage spending. Since August 2024, the RBNZ has cut rates nine times as inflation came under control, bringing the OCR down from a peak of 5.50% (May 2023) to 2.25% as of November 2025 – the lowest since mid-2022.

Housing & Household Utilities is the largest contributor to CPI inflation, with a weight of 29.4%. In the year to September 2025: Electricity (+11.3%) – the highest since the late 1980s, driven by transmission and distribution cost increases; Local authority rates (+8.8%) – reflecting councils' infrastructure and debt costs; Rent (+2.6%) – the smallest annual increase in over four years, as rental inflation moderates with easing net migration and rising housing stock. Rent varies significantly by region: Canterbury (+4.3%) had the highest increase, while Wellington (+0.1%) had the smallest.

Food prices make up 18.5% of the CPI basket. Key drivers in 2025 include: Meat and poultry (+12.2%) due to strong export demand for New Zealand red meat; Vegetables (+12.2% quarterly) with seasonal rises for tomatoes, cabbage, capsicums, lettuce, and broccoli; and Overseas accommodation prepaid in NZ (+9.6%) as travel costs rose. These were partly offset by falling prices for telecommunication equipment (-15.2%) and pharmaceutical products (-80.9%) following Pharmac funding changes for prescription medicines. Overall food inflation has moderated from its 2022–2023 peaks.

Trimmed mean inflation (also called "core" inflation) excludes the influence of the largest price increases and decreases in the CPI. This is done at the item level of about 700 goods and services in the CPI basket. By removing the most volatile price movements (typically the top and bottom 5–10%), it shows the underlying trend in inflation, helping policymakers see through temporary price spikes to understand persistent inflation pressures. The RBNZ publishes sectoral factor model estimates and other core inflation measures to complement headline CPI figures.

New Zealand publishes CPI quarterly (March, June, September, December), typically 12 working days after the reference quarter ends. This reflects New Zealand's smaller economy and statistical resources compared to larger countries. The quarterly approach allows Stats NZ to collect comprehensive price data from 2,800+ retail outlets across 12 pricing centres. While some monthly price data exists (food price index, rent price index), the official headline CPI remains quarterly. This provides reliable data for the RBNZ's monetary policy decisions, which are made at seven scheduled Monetary Policy Statement dates per year.

Not exactly. The CPI measures price changes for a fixed basket of goods, while cost-of-living measures show the change in spending needed to maintain a given standard of living. For example, if beef prices rise, the CPI records this increase, but a cost-of-living measure might account for households switching to cheaper chicken. The CPI is used to set monetary policy and index NZ Super and benefit payments. Stats NZ also publishes the Household Living-Costs Price Indexes (HLPIs) which show how different household types (beneficiaries, superannuitants, Māori, low-income, high-income) experience price changes differently.

As of November 2025, the Official Cash Rate is 2.25%, down from a peak of 5.50% reached in May 2023. The RBNZ cut rates nine times since August 2024 as inflation came under control. This may be the final cut of the current easing cycle, with market expectations for the OCR to remain around 2.25% through 2026. These rate cuts have flowed through to lower mortgage rates, providing relief to households after the sharp rate-hiking cycle that began in October 2021 (when the OCR was just 0.25%).

New Zealand's highest recorded annual CPI inflation was 18.9% in the June 1987 quarter, driven by the 1984 devaluation, wage-price spirals, and the introduction of GST. More recently, inflation peaked at 7.3% in the June 2022 quarter – the highest since June 1990. This 2022 peak was driven by global supply chain disruptions, strong post-pandemic demand, and high net migration. Since then, inflation has fallen substantially to around 3% by late 2025, back within the RBNZ's 1–3% target range. New Zealand adopted inflation targeting in 1990, which has since kept inflation relatively stable.

Inflation expectations are what households, businesses, and financial markets believe will happen to prices in the future. They matter because expectations can become self-fulfilling. If workers expect high inflation, they'll demand higher wages; if businesses expect costs to rise, they'll raise prices preemptively. This "inflation psychology" can entrench high inflation. The RBNZ closely monitors expectations through its Survey of Expectations and aims to keep them "anchored" around the 2% target midpoint. Well-anchored expectations make it easier to control actual inflation.

Inflation erodes the real value of money. If you have $10,000 in a savings account earning 3% interest but inflation is 5%, your money's purchasing power actually decreases by 2% per year. To maintain purchasing power, your investments need to earn a return above the inflation rate (a positive "real return"). KiwiSaver returns are also affected – during high inflation periods, even positive nominal returns may represent negative real returns. Assets like shares, property, and inflation-linked bonds may offer some protection, while term deposits and cash savings can lose value in real terms during high inflation periods.

NZ Superannuation and main benefit rates are adjusted annually on 1 April using CPI inflation. The adjustment uses the percentage change in the CPI between the December quarter of the previous year and the December quarter before that. This ensures payments maintain their purchasing power over time. For example, if CPI rose 3% between December 2024 and December 2025, benefit rates would increase by 3% from 1 April 2026. NZ Super must also remain between 66–72.5% of the average ordinary-time weekly wage (net of tax) for a married couple – this "wage floor" provides additional protection.

Annual CPI inflation dipped to 2.2% in both the June 2024 and December 2024 quarters, near the RBNZ's 2% midpoint. However, it rose again to 3.0% in September 2025, reaching the top of the 1–3% target range. The RBNZ expects inflation to settle around the midpoint (2%) from mid-2026 onwards, assuming no major shocks. Key factors influencing the outlook include: the pace of OCR cuts flowing through to mortgage rates; the labour market remaining loose with spare capacity; and the timing of government cost pressures (electricity, rates). Domestic (non-tradable) inflation remains the key uncertainty.

An inflation calculator helps you understand how prices have changed over time. You can use it to: 1) Calculate what something that cost $100 in 1990 would cost today (adjusting for inflation); 2) See how much your salary needs to increase to maintain the same purchasing power; 3) Understand the real value of historical prices. The RBNZ and Stats NZ publish historical CPI data back to 1926 – nearly 100 years. Our free NZ inflation calculator uses official Stats NZ data covering New Zealand's full inflation history.