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Inflationary Pressures put the Heat on Business

17 January 2008

Inflationary Pressures put the Heat on Business

Rising inflation at a time when the economy is slowing does not bode well for business profitability according to Wellington Regional Chamber of Commerce CEO, Charles Finny, who was commenting on the December quarter inflation figures released today.

“While today’s CPI data is historical, rising inflationary pressures are an increasing concern,” said Mr Finny.

“As well as continuing wage and cost pressures, businesses are facing the prospect of sustained or even increasing interest rates as the Reserve Bank is forced to respond.

“Businesses are already hurting from high interest rates and exporters are receiving a double whammy from the appreciating dollar.

“The government must assist the Reserve Bank in addressing inflationary pressures by curtailing the growth in its expenditure. This is also necessary to make room for the proposed tax cuts.

“We are also concerned about the proposed climate change related emissions trading scheme and the impact that this will have on energy prices further out,” Mr Finny concluded.


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