Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Food Price Index - April 2002

Data Flash (New Zealand) Food Price Index - April 2002

Comment

The food price group is expected to make very little contribution to inflation in Q2. However, at this stage we anticipate a Q2 CPI outcome of 1.2% qoq. Around half of this increase stems from a rise in petrol prices (due both to an increase in excise taxes and world crude oil prices) and a seasonal rebound in seasonal airfares. Other notable contributions are expected from the housing group (+0.2pps, reflecting increased rentals and construction costs) and tobacco and alcohol (0.1pps, in large part due to higher beer prices).

If our forecast is correct, inflation will move close to the top of the RBNZ's 0-3% target range, as predicted by the RBNZ in its March forecasts (the lower than forecast inflation outcome in Q1 is offset by a higher than forecast outcome in Q2, largely reflecting volatility in fruit and vegetable prices and petrol prices).

It remains our view that the RBNZ will hike the Official Cash Rate by 25bps at this Wednesday's Monetary Policy Statement and OCR Review. We expect the Statement to contain a hawkish tone. Markets are pricing a 28% chance of a larger, 50bps, hike. The last Reuters poll showed 9 of 14 economists expect a 25bps hike while 5 expect a 50bps hike. The median chance of a 50bps hike was assessed at 37%.

Key points

The food price index rose 0.1% mom in April (the market expectation was for a 0.2% rise). The annual rate of food price inflation declined to 5.2% from 5.5% in January. The annual rate of food price inflation is expected to decline sharply over the next five months.

General grocery prices fell 0.4% mom. The 0.4% rise over the 3 months to April is the lowest rate of grocery price inflation recorded since December 2000. A greater number of items moved `on special' as opposed of `off special' in April - the converse of March's result. A 1.8% mom rise in fresh fruit and vegetable prices was a key driver over the overall rise. Meat prices fell 0.1% mom but the restaurant and ready-to-eat food group posted a 0.4% mom rise.

Darren Gibbs, Senior Economist

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news