Stats NZ says food price pressures eased during November, driven by a steep drop in fruit and vegetable costs. However, they still sit well above year-ago levels.
Food prices dropped 0.4% in November compared to the previous month, marking the third straight monthly decline. It rose 4.4% annually in the said month compared to the previous year, down slightly from October’s 4.7% increase.
Fruit and vegetable prices dropped 4.5% last month, driven by seasonal items like tomatoes and berries, though they remained 3.7% above year-ago levels.
Prices for essentials like dairy, red meat, and bread stayed higher than a year earlier. Petrol prices sat nearly 3% higher than a year earlier, while domestic airfares climbed over 6% in the latest month but remained more than 14% below last year’s levels.
BNZ head of research, Stephen Toplis, noted that the latest price data, which accounts for nearly half of the consumer price basket, leaves their Q4 inflation forecast unchanged.
BNZ forecasts annual inflation to dip from 3% to 2.8% in the December quarter.
“Annual energy price inflation remains very high, food price inflation is elevated but easing, and rent inflation continues to ease to new multi-year lows,” Toplis said.
Rent hikes moderated to 1.4% above year-ago levels.
Westpac senior economist Satish Ranchhod noted that November’s price data came in firmer than expected, driven mainly by volatile travel categories.
“We expect both tradables and non-tradables inflation will be a bit hotter than the RBNZ expects in the December quarter, with tradable prices accounting for most of that difference,” Ranchhod said.
Westpac forecasts inflation to gradually settle comfortably within the RBNZ’s 2-3% target band by mid-2026.