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

 


NZ food prices fall in July, cementing expectations on rates

NZ food prices fall in July, cementing expectations interest rates are on hold till 2015

By Tina Morrison

Aug. 27 (BusinessDesk) - New Zealand food prices declined in July, adding weight to speculation that softer inflation will prompt the Reserve Bank to keep the benchmark interest rate on hold until next year.

The food price index fell 0.7 percent from June, its first decline in four months, as discounting led to lower prices for beef and processed meat, Statistics New Zealand said. The index was 0.1 percent lower than July last year, the first annual decline in 14 months, led by lower prices for fruit and vegetables, the agency said.

Food prices are one of the components eyed by economists as they evaluate the pace of inflation, as they make up about 19 percent of the broader consumer price index compiled by Statistics New Zealand. Weaker inflation means the Reserve Bank may hold off raising the official cash rate again until next year, analysts said.

"The result adds to recent inflation indicators pointing to a subdued inflation environment for now," ASB Bank economist Christina Leung said in a note. "With the Reserve Bank already having put through 100 basis points of OCR increases this year, we expect it will now pause until next March to assess the effects of the tightening it has done to date."

The Reserve Bank will probably increase the benchmark rate four times next year, with interest rates peaking at 4.5 percent at the end of next year, Leung said.

July food prices fell from June as fruit and vegetable prices slipped 0.9 percent; meat, poultry and fish prices slid 2.2 percent; and grocery food prices declined 0.7 percent, the statistics agency said. Meanwhile, non-alcoholic beverage prices rose 0.2 percent and restaurant and takeaway food prices remained unchanged, it said.

Compared with July a year earlier, fruit and vegetable prices were the only subgroup to record a decline, sliding 5.9 percent, Statistics New Zealand said. Meantime, meat, poultry and fish prices increased 0.5 percent; grocery food prices rose 0.2 percent; non-alcoholic beverage prices gained 1.5 percent; and restaurant and takeaway food prices advanced 2.2 percent, it said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news