Wellington  - Falling petrol prices in the fourth quarter of 2008 helped bring down New Zealand's inflation rate from an 18-year high of 5.1 per cent to an annual rate of
3.4 per cent last year, according to official figures released Tuesday.

The consumer price index (CPI) decreased 0.5 per cent in the October-December period, the biggest quarterly fall in 10 years, and a sharp turnaround from the 1.5-per-cent increase posted in the third quarter, which had pushed annual inflation over 5 per cent, Statistics New Zealand said.

Petrol prices were down 22.4 per cent in the fourth quarter, making the largest individual contribution to the fall.

An 11.2-per-cent rise in the price of groceries saw the food group provide the biggest increase in the annual inflation figure, followed by higher electricity rates, which rose 7.7 per cent. (dpa)