Food prices increased 8% compared to the previous year, according to data from Statistics New Zealand published on Thursday. This is a decline from 8.9% in August and the slowest pace since July 2022. Prices fell 0.4% from a month earlier.
As well as costly fuel prices and increasing home loan interest payments, households in New Zealand have also had to deal with soaring grocery costs. Indeed, food inflation rose to 12.5% in the year through April, Bloomberg reports.
“Soft household demand and greater consumer resistance to paying higher food pricing might be impacting food retail pricing decisions. Resistance to higher prices and lower global food price inflation will see food price inflation continue to slow from here,” said Mark Smith, senior economist at ASB Bank in Auckland.
The pressure on living costs is increasingly significant ahead of the October 14 general election. The ruling Labour party has pledged to cut sales tax on fruit and vegetables in a bid to ease some of the price pressure.
According to the report unveiled on Thursday, fruit and vegetable prices declined 3.9% from August and only edged up 1.4% from September 2022. Although groceries were unchanged in the month, they surged 10.7% from the previous year, the Bloomberg report adds.
A report is due out on Q3 consumer price index inflation on October 17, with provisional estimates indicating annual headline inflation in New Zealand will be around 6%, matching the pace of Q2.
Furthermore, last week, the Reserve Bank of New Zealand said rising global oil prices could hike domestic costs over the next few months, and there was a risk headline inflation could be higher than forecast.
The central bank added it wants interest rates to stay restrictive for an extended period to revert inflation back to the target of between 1% and 3%.
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