Food prices increased 12.1 per cent in the year to May 2023, Stats NZ said today.
We were very luck that it has come in under last months 12.5% but the real challenge will be August.
At the end of this month the 25cent fuel subsidy will be reapplied and that will impact every single cost.
The silver lining on oil prices is that the Chinese economy has spluttered and is failing and so isn’t using as much oil which is lowering global demand, despite OPEC production cuts.
This becomes way more problematic if OPEC make steeper production cuts to match China’s slowdown.
Either way, petrol inflation which has tempered inflationary pressures is about to reignite.
Food inflation will peak going into the election and that is going to be an enormous political headache for the Government.
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