Wellington, New Zealand (4E) – The annual inflation rate in New Zealand quickened in the fourth quarter, strengthening the case that the Reserve Bank will increase interest rates as early as January.
Consumer prices climbed 1.6 percent in the final quarter of 2013 from the previous year, the fastest rise since 2012, while prices rose 0.1 percent from the third quarter, according to a Statistics New Zealand report released in Wellington Tuesday.
Economists surveyed by Bloomberg News predicted a 1.5 percent rise in annual inflation and 0.1 percent decline from the previous quarter.
Higher cost of international air travel and increased housing and dairy prices were partly offset by lower prices of vegetables and cheaper gasoline in the fourth quarter, according to the statistics bureau.
For the quarter ended December 2013, international air fares rose 12 percent, which marks the highest quarterly increase since the December quarter of 2009.
Cost for housing and household utilities climbed 0.5 percent, as prices increased for the purchase of newly built homes, housing rentals and property maintenance.
Milk, eggs and cheese saw a 4.2 percent rise in prices, the highest quarterly gain since the September quarter in 2010, according to the bureau.
In a separate report, business confidence climbed to its highest level in 20 years in the fourth quarter, reflecting a steady rise in inflation pressure, according to the New Zealand Institute of Economic Research report released last week.