NZ: Food Price Index - August 2001

Data Flash (New Zealand) NZ: Food Price Index - August 2001

Key points

The food price index rose by 0.5%mom in August - the market had expected an increase of 0.3% mom. The annual rate of food price inflation rose to 6.3% from 5.8% last month - the highest rate of annual food price inflation since June 1990. The Food Price Index makes up 18% of the CPI regimen.

Fruit and vegetable prices rose 0.9% mom to be 12.5% higher than a year earlier.

Meat prices rose 2.2% mom to be 11.9% higher than a year earlier. Groceries fell 0.1% mom due to a greater proportion of goods going `on special' than `off special'. Recently increases in milk and dairy product prices will be captured in the September survey, leading to an estimated 2% mom rise in grocery prices.

The Restaurant and takeaway meals index rose 0.3% mom and 3.7% yoy.

Comment

Our preliminary forecast for the Q3 CPI is 0.5-0.6% qoq (the RBNZ forecast 0.6% qoq in its August Monetary Policy Statement). This result would see the annual rate decline from 3.2% to 2.3-2.4%.

Darren Gibbs, Senior Economist

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