Food prices steady

By Phil Boeyen, ShareChat Business News Editor

Monday 13th May 2002

Food prices rose just 0.1% in April according to latest figures.

Statistics New Zealand says higher fruit and vegetable prices, and restaurant meal and ready-to-eat food prices, were partly offset by falls in grocery food prices during the month.

Fruit and vegetable prices rose by 1%, making the most significant upward contribution to the overall change in food prices. Prices for potatoes rose 10%, lettuce prices increased by 14% and avocado price were up 33%.

Restaurant meals and ready-to-eat food prices also made an upward contribution, recording an increase of 0.4%, mainly due to higher ready-to-eat food prices, which rose by 0.5%.

Statistics NZ says meat, fish and poultry prices fell by 0.1% and have shown a pattern of alternating increases and decreases for the past six months, following a period of seven consecutive monthly increases.

Deutsche Bank says the food price group is expected to make very little contribution to inflation in the second quarter.

The bank is picking a second quarter increase of 1.2% in the Consumer Price Index, mostly from higher petrol prices and a seasonal rebound in seasonal airfares.

"If our forecast is correct, inflation will move close to the top of the RBNZ's 0-3% target range, as predicted by the RBNZ in its March forecasts," says senior economist, Darren Gibbs.

The bank is expecting the Reserve Bank to raise interest rates by 25 basis points at this Wednesday's monetary policy statement and official cash rate review.

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