Food inflation remains near record levels, driven by high grocery prices.
Stats NZ’s food price index rose 1.7 percent in January on the month before. It was the biggest monthly rise in six months.
The annual rate eased to 10.3 percent from 11.3 percent in December, but had been rising above the 10 percent rate since last October.
“Increasing prices for cheddar cheese, barn or cage-raised eggs, and potato chips were the largest drivers within grocery food,” consumer prices manager James Mitchell said.
Food price movements for the year ended January
- Grocery food +11 percent
- Restaurant meals and ready-to-eat food +8.3 percent
- Fruit and vegetables +16 percent
- Meat, poultry, and fish +9.2 percent
- Non-alcoholic drinks +7.1 percent.
Groceries were also the main driver of the monthly increase, once again on the back of high egg prices, while fruit and vegetable prices were influenced by sharp rises in greens, such as broccoli and lettuce, and fruit.
ASB senior economist Mark Smith said food inflation was strong across the board with about three quarters of the items in the food price index rising. But it should be peaking as commodity prices fell around the world, he said.
“However, the risk is that rises in food prices takes longer to slow,” Smith said.
“Recent North Island storms are expected to push food prices higher still in the coming months.”
The strength of food inflation would be a factor in keeping inflation close to the 7 percent level for some time, he said, which would see the Reserve Bank persevere with more interest rate rises.