Immigrants and Inflation

Winston Peters is blaming the high inflation rate on our level of immigration. Now there is liitle dispute that immigration can fuel inflationary pressures, especially if infrastructure is not geared up to cope (which arguably is the case in Auckland where most go).

But if we look at the net migration, it is hard to conclude that is a big part of the problem. The net permanent and long-term migration for the years to March are:

2000 -8,990
2001 -12,600
2002 25,640
2003 41,590
2004 27,980
2005 10,010
2006 9,740
2007 12,080

So in 2002 to 2004 there was some pretty high levels. But since 2004 net migration of 10,000 a year is pretty modest, compared to overall population growth which averaged 58,000 a year.

So Winston has a bit of a point, Immigration can be a factor. But at present levels it isn’t much of one. Peters quotes gross migration as it suits him politically, but it is net migration that matters.