WELLINGTON, Oct 15, 2007 (AFP) – New Zealand’s inflation rate for the September quarter was held to an unexpectedly low 0.5 percent, pinning the annual rate to 1.8 percent, according to official figures released Monday. New Zealand inflation lower than expected
The lower than forecast result — attributed to lower prices in health and education due to new or higher government subsidies — is expected to ease any lingering concerns of further interest rate rises.
Economists had estimated a 0.8 percent quarterly rise with an annual inflation rate of 2.1 percent.
The September result could provide breathing space for the central bank which has an inflation target of 1.0-3.0 percent at a time of record oil prices.
Interest rates have already been lifted four times this year to 8.25 percent due to concerns about robust domestic spending, particularly in the housing market.
Statistics New Zealand said the most significant upward contribution in the September quarter came from the housing and household utilities group, up 1.8 percent, and the food group, up 1.2 percent.
The most significant downward movement came from a 3.1 percent fall in the health group and a 5.2 percent drop in education.