New Zealand's Consumers Price Index (CPI) increased 2.2 percent year-on-year in the fourth quarter of 2024, following a 2.2 per cent annual increase in the third quarter of 2024, both being slower increases, according to the statistics department Stats NZ on Wednesday.

"Prices are still rising, but not as much as previously recorded," Stats NZ prices and deflators spokesperson Nicola Growden said, adding the most recent peak was in the second quarter of 2022 when the annual inflation rate reached 7.3 per cent.

"This is the second consecutive quarter that the annual inflation rate has been within the Reserve Bank of New Zealand's target band of 1 to 3 per cent," Growden said, adding the annual inflation was above the target band between the second quarter of 2021 and second quarter of 2024.

Almost a fifth of the 2.2 per cent annual increase in the CPI was due to rent prices, which was up 4.2 per cent, the largest contributor to the annual inflation, she said, adding the annual rent inflation ranged between 4.2 per cent and 4.8 per cent between the fourth quarter 2023 and the fourth quarter 2024, continuing to grow at a consistent rate.

The 2.2 per cent annual inflation increase also included 16 per cent contribution from local authority rates and payments which increased 12.2 per cent in the 12 months to the fourth quarter 2024, statistics show.

Cigarettes and tobacco prices contributed 11 per cent to the 2.2 per cent annual CPI increase, up 7.6 per cent in the 12 months to the fourth quarter 2024, mainly due to the annual tobacco excise tax increase on January 1, 2024, Xinhua news agency reported.

The latest rising inflation was offset by lower petrol prices, which was down 9.2 per cent, partially due to the removal of the Auckland regional fuel tax of 10 cents per litre on June 30, 2024, Growden said, adding petrol makes up about 4 per cent of the CPI basket.

"If petrol was excluded, the CPI would have increased 2.7 per cent in the 12 months to December 2024," she said, adding lower prices for vegetables, down 14.6 per cent, also offset the annual CPI increase.

Quarterly, the CPI rose 0.5 per cent in fourth quarter of 2024, compared with the previous quarter, mainly contributed by prices for international air transport, which was up 6.6 per cent, according to Stats NZ.