Petrol prices are up 27.5%, diesel’s up 71%,
and electricity’s up 12%.
But Finance Minister Nicola Willis has said there are some encouraging numbers in the release.
Annual food price inflation is falling from 4% to 2.8%. Annual rent increases were only 0.5% across the year, the lowest for almost 25 years.
“Despite the conflict in the Middle East, New Zealand’s economy is set to grow 2.7 per cent on average every year for the next four years, creating 220,000 jobs.
“Wages are expected to grow faster than prices over that period, which is ultimately how we can make life more affordable for New Zealanders long-term.
“This Government is building New Zealand’s future and ensuring we can withstand any future shocks,” she said.
NZ Herald business editor at large Liam Dann told The Front Page that Kiwis have already been through a long stretch of high inflation.
“Obviously you can’t do anything about what’s happened to globally traded oil prices other than try and get off our addiction to fossil fuels. There’s no immediate short-term fix there.
“But then there is this underlying inflation rate in New Zealand that has been too high for too long. One of the fundamental things about inflation, once you get away from short-term supply shocks, is that it’s driven by how much money is circulating in the economy.
“If you have very low interest rates and a lot of government spending, it pushes heaps of money into the economy, spending speeds up, and price rises start to accelerate. And we had that huge period of inflation in the year or two after Covid. So the Reserve Bank pushed up interest rates, tried to bring everything down, and sort of crashed the economy in doing so.
“Unfortunately, we copped this external shock with the petrol prices, and it’s just extending the period of pain or limiting the Reserve Bank’s ability to soften things now,” he said.
Listen to the full episode to hear more about:
- Politics and discipline
- Interest rates
- A cautious outlook
- Looking forward.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5pm. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.