Annual inflation rate falls to 3.7 percent in September quarter
Thursday 22 October 2026 · 4 outlets · 4 reports · updated In this story Stats NZ
New Zealand's annual inflation rate dropped to 3.7 percent in the September 2026 quarter, down from 4.1 percent in the previous quarter. Stats NZ reported that a fall in petrol prices helped offset other increases. However, some economists warn that inflation may rise again in the current quarter.
Key facts
5 facts
- Annual inflation rate: 3.7% for the September 2026 quarter
- Previous annual inflation rate: 4.1% in the June 2026 quarter
- Reserve Bank inflation target band: 1% to 3%
- Petrol annual price increase: 19.1%
- Quarterly CPI increase: 0.7% for the September quarter
The full story
1 min read · 4 outlets
New Zealand's annual inflation rate dropped to 3.7 per cent for the 12 months to the end of the September 2026 quarter. This follows a 4.1 per cent annual increase recorded in the June 2026 quarter.
Petrol was the primary driver of the annual inflation increase, with prices rising 19.1 per cent over the year. However, petrol prices fell by 6.5 per cent during the September quarter compared to the June quarter. Without the impact of petrol, the annual consumer price index would have risen by 3.2 per cent.
Other contributors to the annual rise included international airfares, which increased by 12.5 per cent, electricity at 9.3 per cent, and local authority rates at 6.2 per cent. The cost of constructing new housing rose by 3.2 per cent, driven by higher costs for labour, materials, subcontractors, and fuel.
Economists have warned that the current figures may not reflect recent price trends. ASB senior economist Mark Smith predicted that rising construction costs, airfares, and a weak New Zealand dollar could push annual inflation to 4.5 per cent by the end of the year. BNZ research head Stephen Toplis also forecast that annual inflation could climb to 4.7 per cent in the current quarter.
How it developed
- Thu 22 Oct, 11:43amThe report notes that a 14 per cent rise in airfares was the single biggest factor in the quarterly increase.
Where reports differ
- One report states airfares rose 12.5 per cent annually, while another states they rose 14 per cent.
Compiled from reports by The Post, NZ Herald, 1News and Otago Daily Times.