Inflation in New Zealand is at its slowest rate in two and a half years, measured at 4.7 per cent across 2023.
On Wednesday, Stats NZ revealed the latest consumers price index (CPI) data, showing a huge slowdown in from 5.6 per cent in the year to September 2023.
Food and transport prices fell in the last quarter of 2023, driving the lower inflation.
At 4.7 per cent, CPI is still above the Reserve Bank of New Zealand's target band of 1-3 per cent.
However, the fall should end speculation that the RBNZ could be planning a fresh hike of the official cash rate (OCR), which sits at 5.5 per cent.
Its next decision on Kiwi interest rates will come at the bank's next monetary policy committee meeting on February 28.
Finance Minister Nicola Willis told AAP it was "good to see progress" towards lower inflation, a key goal of the newly elected government.
"Our immediate focus is getting inflation back into the target range under three per cent," she said.
The government made the restoration of the RBNZ's single mandate, to fight inflation, its first piece of legislation on taking office in November.
The fall to 4.7 was in line with local bank economists' expectations, but beyond the RBNZ's prediction of five per cent.
"Inflation came in bang in line with our expectations. But there's no fun in that," Kiwibank chief economist Jarrod Kerr said.
"Don't get us wrong, it's good news. But deep down we were hoping for a downside surprise."
The annual inflation rate is at its lowest since June 2021, while quarterly inflation was measured at 0.5 per cent, the smallest rise since December 2020.
CPI inflation in New Zealand peaked at 7.3 per cent in 2022.
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