According to Infometrics principal economist, Brad Olsen, New Zealand may soon see a decline in the high prices of fruits and vegetables. Despite this, Olsen states that the costs are still "flipping expensive".
For over two years, New Zealanders have been grappling with increased inflation and a significant rise in food prices. The country is also on the verge of another recession, with a 0.3% drop in GDP in Q3 2023.
However, there's some relief as inflation fell to 4.7% in December, the first time it's been under 5% since September 2021. Stats NZ data shows that food price inflation was 4.8% in December, and ASB predicts it will drop below 3% by mid-2024.
Olsen mentioned on AM on Monday that fruit and vegetable prices are expected to normalize this year. He said, "I think we're starting to get through some of those big challenges that have persisted over the last two years with higher inflation, which of course has hit everything but in particular we've been seeing food prices in general, getting really expensive."
He pointed out that high prices last summer were due to supply constraints, expensive fuel, and costly fertiliser. But recent improvements are allowing the seasonal pattern to return. "In more recent times, we've seen those numbers start to get back a little bit more to normal. Fruit and veg prices fell 6.4 percent in the December quarter," he said.
Despite the positive trend, prices are still 44% higher than pre-pandemic levels. Olsen also highlighted that certain fruits, such as apples and grapes, are particularly expensive. However, he noted that avocados and tomatoes are currently good value for money.
Source: newshub.co.nz
