RTTNews - New Zealand's consumer prices rose at the slowest pace in almost two years in the second quarter, official data indicated Thursday.

Data released by the Statistics New Zealand showed that the consumer price index climbed 1.9% year-on-year in the second quarter, slowing from a 3% increase in the first quarter. Economists expected a rise of 1.8%. This was the slowest rise in consumer prices since the September 2007 quarter, when prices were up 1.8%.

The statistical office said food prices contributed to two-thirds of the increase, rising 7.5% in the second quarter. Alcoholic beverage and tobacco prices were up 4%. The housing and household utilities prices rose 2.8% in the year to June, representing the smallest annual rise since the year to March 2002 quarter.

For the first time since the year to September 1999 quarter, the annual increase for purchase of new housing was lower than rentals for housing. However, transport and communication prices dropped 6.6%, the steepest fall among the groups.

Sequentially, the consumer price index rose 0.6% in the second quarter, faster than a 0.3% rise in the first quarter. Food prices rose 0.9% and made the biggest positive contribution to the index. Increasing petrol prices and second-hand car prices pushed up the costs of transport and communication by 0.6%.

In a separate report, the statistical office said food prices rose 2.8% month-on-month in June, following a 0.3% increase in May and a 0.6% fall in April. This was the largest monthly rise since a 3.8% growth in July 1989, the report said.

All five of the food subgroups increased in June, led by a 15% rise in the prices of fruit and vegetables.

Year-on-year, food prices were up 8.4% in June, quicker than a 6.8% rise in the preceding month, reflecting a rise in prices of all five of the food sub groups.

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