Source: Radio New Zealand
RNZ / Unsplash
- Fuel prices surge in March on Middle East conflict
- Food prices ease 0.6 in March on month before
- Annual food inflation lowest in a year
- Consumer spending inflated by fuel costs
- Other partial inflation indicators show modest rises in power/gas, accommodation
- Full inflation numbers for March quarter due April 21
The immediate impact of the Middle East conflict has been measured in a sharp surge in fuel prices, while consumer spending has been softer.
Stats NZ data shows fuel prices rising nearly 19 percent for petrol and 43 percent for diesel last month on February, distorting consumer spending as households trimmed discretionary spending to cover higher fuel bills.
“The increases in petrol and diesel prices this month were the largest for both fuel types since Stats NZ started publishing monthly price movements for vehicle fuels in July 2011,” the department said in a statement.
Giving some relief was an easing in food inflation, which was down 0.6 percent for the month taking the annual rate to 3.4 percent from 4.5 percent in February.
High meat prices remained the driver of annual food inflation, along with bread, and takeaway coffees, while the monthly fall was due to cheaper fruit and vegetables, some dairy and chocolate products.
The selected prices were contained in a monthly tally of consumer costs covering fuel, food, rents, commercial accommodation, utility prices, alcohol and tobacco.
The goods and services surveyed make up close to half of the official inflation measure, the consumer price index which is due out on April 21 for the first three months of the year, with economists picking the annual rate is headed towards 5 percent .
Airfares were a mixed bag, with domestic airfares falling more than 14 percent on the month before but international fares rising 3.5 percent.
“Travellers typically book and pay for airfares in advance, so price changes reflect fares that were set up to 12 months ago,” prices and deflators spokesperson Nicola Growden said.
Fuel spending surges, discretionary lower
Stats NZ also released electronic card retail spending for March, showing a 0.7 percent increase on February, which reflected the surge in fuel prices.
Excluding fuel spending, which rose 17 percent for the month, overall card spending was 0.1 percent lower.
Spending on consumables such as food and durables such as appliances and electronics were higher, but were offset by reduced spending on hospitality and apparel.
Westpac senior economist Darren Gibbs said the spending numbers for the first three months of the year were up about 1 percent backing the view that the economy had been gathering pace at the start of the year.
“Looking ahead, at least in the near term, high fuel prices will continue to siphon money out of households’ pockets.”
“At the same time, higher transport costs will add to costs of production for a variety of other goods and services and will continue to significantly undermine consumer confidence,” Gibbs said.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
