Business. Scoop » Falling Fuel Prices Take Edge Off Inflation Data
Article – RNZ Food prices rose 0. 1 percent for the month to be 1. 9 percent higher than a year ago, the lowest annual rate since December 2024. Gyles Beckford Economics correspondent Fuel prices fall in. . .
Article – RNZFood prices rose 0. 1 percent for the month to be 1. 9 percent higher than a year ago, the lowest annual rate since December 2024. Gyles BeckfordEconomics correspondentFuel prices fall in July amid US-Iran war uncertaintyFuel prices still much higher than year agoFood prices edge higher on back of seasonal lift in fruit/vegMeat, groceries, rents fall; energy prices mostly flat; airfares/accommodation higherItems account for about half of consumer price inflationFalls in fuel prices helped to keep a lid on household costs in a partial measure of inflation for July. Stats NZ figures showed petrol prices fell 5. 7 percent in June and diesel prices were down 12. 1 percent, as global energy prices remained lower but fluctuated amid the uncertainty about thestate of US-Iran hostilities. It was the third month in a row that fuel prices have fallen. “The recent declines mean prices for petrol and diesel are now below levels recorded in March, although they remain higher than in February,” prices and deflators spokesperson Nicola Growden said. However, petrol was still 15. 1 percent higher than a year ago and diesel was nearly 35 percent more expensive over 12 months. Fuel prices make up about 4 percent of the broad inflation measure, the consumer price index (CPI). Food prices rose 0. 1 percent for the month to be 1. 9 percent higher than a year ago, the lowest annual rate since December 2024. Fruit and vegetables were the main driver for the month, reflecting the seasonal impact on supplies, notably strawberries, cucumbers and capsicums. But those increases were offset by cheaper meat and poultry and some grocery items including soft drinks. “Meat and poultry prices recorded their largest monthly fall in more than five years,” Growden said. The annual rate was driven by more expensive takeaway meals and ready-to-eat food, along with milk, takeaway coffee and some bread. Food prices make up about 19 percent of the CPI. Electricity, gas and rents were all flat or marginally cheaper, which helped to offset higher domestic and international airfares and local commercial accommodation. Domestic airfares rose nearly 21 percent on June, the biggest July month increase in 11 years. The items measured make up about half of the CPI, which quickened to a two-year high of 4. 1 percent in the year ended June. Price rises softer than expected, a positive for RBNZEconomists said overall the selected prices were softer than expected, and pointed to a fall of about 0. 4 percent in overall consumer prices. “Consumer caution and the subdued demand backdrop still look like it’s having a moderating impact on inflation,” ASB senior economist Mark Smith said. “The inflation outlook is uncertain, but New Zealand annual consumer price index inflation looks to be cooling from its 4. 1 percent peak. ”Westpac senior economist Satish Ranchhod agreed inflation had likely peaked and would ease further, but not quickly. “We’re still left with a picture of inflation that’s likely to be well above the RBNZ target range for the remainder of this year, including firm levels of core inflation. ”He was expecting a quarterly inflation rise of 0. 7 percent for the three months ended September, and an annual rate of 3. 7 percent, but said the numbers might be weaker. ASB’s Smith said inflation below 3 percent, the top end of the the Reserve Bank’s target band was still close to a year away, and in the meantime the RBNZ would keep raising its official cash rate (OCR). “Our view remains that the OCR – currently 2. 5 percent – will continue to move higher as the RBNZ seeks to normalise OCR settings in a timely fashion. A 3. 25 percent [rate] by year end beckons. ”Content Sourced fromscoop. co. nzOriginal url