Inflation is the term used to describe a rise of average prices through the economy. It means that money is losing its value. This section provides a variety of resources that explain inflation and deflation. This connects to how the Reserve Bank uses monetary policy to maintain price stability.

Explaining inflation
Inflation - a thief in your wallet
Inflation — a thief in your wallet
Former Chief Economist, John McDermott, explains how inflation is measured and how it manifests itself in everyday life. He also explains the importance of maintaining price stability.

New Zealand's Consumers Price Index (CPI)

Key graph: inflation since 1990

Since 2000, New Zealand CPI (Consumers Price Index) inflation has averaged around 2.7 percent. This compares with averages of 2.4 percent in the 1990s, and averages of over 11 percent for the previous two decades. Since September 2002, the inflation target has been to keep inflation within a range of 1–3 percent on average over the medium term.

Go to the Inflation key graph page for more historical information on inflation.

Notes: CPI is published on a base of 2006 Q2=1000. The plotted series excludes interest rates, which were removed from the CPI regimen in 1999, but includes GST effects.

Resources on inflation
Thumbnail - Fact sheet - What is inflation?
Inflation and deflation in the New Zealand context.
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The Reserve Bank publishes its Monetary Policy Statement (MPS) quarterly.
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Amendments to New Zealand’s monetary policy framework came into effect on 1st April 2019. The remit, charter and code of conduct are key components of the new framework. The remit provides the Monetary Policy Committee (MPC) with its operational objectives, consistent with the economic objectives in Section 8 of the Reserve Bank of New Zealand Act (1989). The MPC will also be bound by the MPC charter and code of conduct. The charter provides directions on decision making procedures, transparency and accountability. The code of conduct sets out minimum standards of ethical and professional conduct that must be adhered to by members of the MPC.