Data Flash (New Zealand)
Food Price Index (November 2001)
Key points
The food price index rose a 0.1% mom rise in November (the market expectation was for a 0.2% rise).
The annual rate of food price inflation declined from 7.7% in October to 6.7% in November. A 3.6% mom decline in fruit
and vegetable prices was more than offset by higher prices for meat (+1.3% mom), general groceries (+0.5% mom) and
restaurant and ready-to-eat food (+0.7% mom).
Comment
Although global commodity prices have softened in recent months, earlier sharp increases in the prices obtained for
basic meat and dairy products are continuing to have both direct and indirect impacts on the food price index (eg this
month, significant prices rises were recorded for beef, cheese, sandwiches and chocolate).
Our preliminary forecast for the Q4 CPI is +0.5% qoq (the RBNZ forecast 0.6% qoq in its November MPS). This result would
see the annual rate decline from 2.4% to 1.8%.
Darren Gibbs, Senior Economist