Inflation Drops to 3.3% as NZ's Economy Shows Signs of Recovery

Treasury’s Budget forecasts suggest an improving economic outlook for the latter part of this year, with inflation receding, interest rates declining, and growth recovering.

Today's Consumer Price Index data reveals that inflation stands at 3.3 percent for the year to July 2024, indicating progress in turning the economy around and combating rampant inflation, Finance Minister Nicola Willis announced.

"While today's data will be welcome news for Kiwis, I know many New Zealanders are still struggling with the ongoing cost of living crisis. Our work is not done, and the Government is committed to rebuilding our economy so that workers, businesses, and families can get ahead," said Minister Willis.

Treasury's Budget forecasts suggest an improving economic outlook for the latter part of this year, with inflation receding, interest rates declining, and growth recovering.

"Our focus remains on reducing inflation to the Reserve Bank's target range of 1 to 3 percent. When interest rates begin to fall, it will provide real cost-of-living relief for New Zealanders and allow our economy to regain momentum," she added.

"The Budget we delivered in May was a careful balance of investing in frontline services while also doing our part to keep inflation down. Today's data confirms that our approach in Budget 24 was the right one – prudent government spending, lower taxes for hard-working New Zealanders, and laying the foundations for New Zealand's economic recovery."

Minister Willis highlighted the tax relief package taking effect at the end of this month, which will allow Kiwis to keep more of their earnings and further ease the cost of living for low and middle-income families. The tax relief package provides average income households up to $102 a fortnight, along with FamilyBoost childcare payments of up to $150 per fortnight for eligible families with young children.