New Zealand's central bank has warned of more persistent consumer price inflation pressure. Nowhere has this become clearer than by the 43 percent year-on-year rise in the price of everyday fruit.
In its monetary policy statement, today, the Reserve Bank has acknowledged the risk of rising prices. "More persistent consumer price inflation pressure is expected to build over time due to rising domestic capacity pressures and growing labour shortages," it says. "Uncertainties remain as to the pace and magnitude of any pass-through of costs onto medium term inflation, especially given reported underutilisation of labour, modest wage growth, and well anchored inflation expectations."
According to Statistics NZ, fresh tomatoes are already up to $11.19 a kilo this winter with two months still to run until they peak. The 11.5 percent year-on-year increase in the price of vegetables is the biggest in four years, and pushes overall food prices up 2.8 per cent. It was driven by tomatoes, cucumbers, lettuce, capsicum, and broccoli which, even allowing for seasonal volatility, have still smashed price records.
The food price rises were revealed on the eve of the Reserve Bank's monetary policy statement, in which Governor Adrian Orr and the Monetary Policy Committee are announcing their response to mounting inflationary pressure.
Source: newsroom.co.nz
