WELLINGTON, New Zealand (AP) — Inflation in New Zealand has slowed to its lowest rate in two and a half years, the country’s official statistics agency announced on Wednesday.

Stats NZ revealed the latest consumers price index (CPI) data had slowed to 4.7% across 2023, a significant drop from the 5.6% result in the year to September 2023.

The agency said falling food and transport prices were the main drivers of the slowdown in the inflation rate which had peaked at 7.3 per cent in 2022.

While the CPI is still above the the Reserve Bank of New Zealand’s target band of 1-3%, the better than expected slowdown all but ends any speculation of a further hike of the official cash rate — which currently sits at 5.5% — when the Reserve Bank next meets in on Feb. 28.

The fall to 4.7% was in line with market expectations, but lower than the Reserve Bank’s prediction of 5%.

New Zealand Finance Minister Nicola Willis said a key goal of the government was to lower inflation.

“Our immediate focus is getting inflation back into the target range under three per cent,” she said.

The result means annual inflation rate is now at its lowest since June 2021, while quarterly inflation was tracked at 0.5 per cent, the smallest rise since December 2020.