New Zealand has experienced significant macroeconomic volatility in recent years, influenced by its reliance on agricultural exports, international tourism, and robust fiscal measures. Following the global disruptions of the late 2010s, the Kiwi economy showed strong initial signs of recovery, but faced persistent capacity constraints, labor shortages, and rising global shipping costs.
Table 1 – A comparison of New Zealand and the OECD average annual % real GDP growth rates – 2018–2023
| Year | New Zealand (%) | OECD average (%) |
|---|---|---|
| 2018 | 3.2 | 2.4 |
| 2019 | 2.4 | 1.7 |
| 2020 | -1.1 | -4.3 |
| 2021 | 5.1 | 5.6 |
| 2022 | 2.7 | 2.9 |
| 2023 | 0.6 | 1.6 |
The Reserve Bank of New Zealand (RBNZ) monitored price indices closely throughout this period to counter escalating domestic inflation, driven by rising energy costs and strong domestic wage growth.
Table 2 – New Zealand's Consumer Price Index (CPI) Quarterly Figures – December 2021 to December 2022
| Dec 2017 = 100 | Dec-21 | Mar-22 | Jun-22 | Sep-22 | Dec-22 |
|---|---|---|---|---|---|
| Consumer Price Index (CPI) | 111.8 | 113.5 | 115.4 | 117.2 | 119.5 |
Using the data in Table 2, calculate New Zealand's rate of inflation between December 2021 and December 2022. Give your answer correct to two decimal places.
