Why 4.7% CPI inflation is bad and how Red Sea conflict will make it worse


CPI inflation falls in line with expectations to 4.7 per cent in December quarter

Annual inflation fell in line with economists’ expectations to 4.7 per cent in the final three months of 2023.

This was a decent improvement from the September quarter, when it sat at 5.6 per cent.

Inflation eased more than the Reserve Bank (RBNZ) anticipated in November, when it forecast the figure falling to 5 per cent in the December quarter.

Nonetheless, at 4.7 per cent, the rate remained out of the RBNZ’s 1 to 3 per cent target range.

The vast majority of Kiwis under pressure from the cost of living crisis will find cold comfort in the claim CPI ‘only’ went up 4.7%.

The 600 000 needing food banks monthly won’t notice the distinction.

Those first time home buyers bleeding mortgage repayments won’t feel a ‘drop’.

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Any such market euphoria has to be tempered with what we are escalating in the Red Sea with shipping costs jumping 300% since November.

As a trading nation, these costs will spike into NZ and we will see that impact in the next quarter.



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  1. Don’t worry Martyn, the terrified, petrified looking Deputy PM, Baldy Luxon standing next to Prime minister Winnie Peters will save NZ Shipping costs from the Houthi’s with those 6 x NZDF personnel being sent over to Yemen, I’m sure those dastardly Houthi’s will lay down their arms in fear at the prospect of facing the Military might of Aotearoa, one bloodcurdling Haka should do it & if Yemen fails to submit, we might have to send over our Air Force to seal the deal, yes that Hercules C-130 is on the way, HOORAH? Look on my works ye mighty & despair, Bahaha!

        • I am not sure this coalition will last six years. “Putting up with National” doing what at this point? There’s far too much accommodating Act and NZF going on. Luxon at points looks fed up. The treaty ‘debate’ is just plain f’ing stupid ( which National have pointed out), and now we have issues like Costello caught out lying about inflation proofing cigarette prices. Not food, tobacco. She’s supposedly worried about the cost for Maori and Pacific peoples!! Funny, I thought we were only worried about NZers as one melting pot of persons? Then we have the ever dodgy Shane Jones and his new provincial slush fund ( at least that’s what National and Act used to call it when convenient). It’s a mess.

  2. Six soldiers is probably half of our ready force. The rest have left because they disagreed with being used as security guards for Adern’s illegal detainment of NZ citizens returning home during covid.
    Also it’s a naval issue but our navy is currently unable to deploy a single vessel on any long term mission.

  3. To use the government’s favourite buzz word du jour, one should not conflate inflation with CPI.
    Inflation is the general increase in prices, and CPI is the increase of a small basket of goods which has been manipulated over the last 4 decades to represent a number half or less of true inflation.
    An artificially low CPI keeps interest rates artificially low, increases in money supply and property values artificially high, and real wage growth negative.

  4. ” The new government inherited finances in better shape than expected, according to latest Treasury figures.”

    ” The budget deficit for the five months ended November was $2.8 billion, about $1.1b lower than forecast in the half-year financial update (HYEFU).”

    This report from treasury makes a mockery of Willis and Luxon and the bullshit they campaigned on about how Robertson had left an empty cupboard which was deliberate to sell the whole idea of cutbacks to the electorate to help provide for their entitled supporters generous tax cuts.

    ” Willis has detailed a range of cost savings and new revenue totalling $7.5b over the next five years from axing clean car discounts, early childhood subsidies, and ending big projects. A Budget policy statement is due in March and will provide more detail on spending priorities.”


    ” Minister of Finance Nicola Willis has accused the previous government of finding “workarounds” to hide the scale of short-term funding, a claim Grant Robertson says is “desperation ”

    ” Willis raised her concerns with the media in this week’s post-Cabinet briefing on Monday afternoon, saying the early advice suggested a shortfall of “many billions” of dollars.”

    ” Nicola Willis “I am concerned by the scale of the financial challenges left to us by the outgoing government. I am still receiving advice on both the number of those challenges, their size, and the options available,” she said.”


    • Excellent points. More needs to be written about this, right now it’s like whatever Willis says no matter how far from reality, it becomes ‘true’. People believe it. Why why why???

  5. Feb is when I decide my new charges, after the inflation rate and the new minimum wage. The last doesn’t appear to be coming.

    Why do Seymour and the new transport minister look as so they’ve never worked in an orchard, let alone a freezing works. Got to their positions sans rough reality.


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