Chocolate spikes, rents stall
January’s price data paints a mixed picture for New Zealand households – and for the Reserve Bank ahead of its next decision.
Westpac’s Satish Ranchhod (pictured left) says the latest update “probably won’t alarm the RBNZ,” with overall prices close to forecasts and driven by higher food costs but softer moves in other categories.
Food prices jumped 2.5% in January and are up around 4.5–4.6% over the past year. Both Westpac and ASB highlight that “food price inflation remains elevated at 4.6%, and continues to advance, making eyes water as we walk down the grocery aisle.”
That pressure is being driven largely by global commodity markets and looks “more persistent”, even if it can be disinflationary over time as it squeezes discretionary spending.
There was also a headline‑grabbing move in confectionery: the price of a block of chocolate is up 20% on a year ago, with a 5% monthly rise in sweets in the lead‑up to Valentine’s Day.
Rents flat, energy pressures easing
Average rents were flat in January – the first time since 2007 they haven’t risen in a January – with annual rental inflation near record lows.
ASB's Wesley Tanuvasa, economist, and Mark Smith, senior economist (pictured, center to right), “rental inflation has remained dormant,” reflecting low population growth and a strong supply response from higher‑density building.
Energy‑related inflation is also easing. ASB estimates household electricity and gas prices rose just 0.3% in January, with annual household energy inflation slowing to 11.9% from 13%. Petrol prices fell 2.4% over the month.
Together, these trends mean January prices “decelerated 0.4%, broadly as per expectations,” with ASB seeing “green flags and yellow flags, but no red flags.”
For more information, read the Stats NZ report as well as the commentaries from Westpac and ASB.
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