New Zealand November Food Price Index -0.4% m/m
- prior -0.3%
- for the y/y, a rise of 4.4%
Food prices make up nearly 19 percent of the consumer price index in NZ.
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The New Zealand Food Price Index (FPI) is a measure of the changes in the average price of food items sold in New Zealand.
- calculated and published monthly by Statistics New Zealand
- the FPI tracks the prices of a basket of food items that represent the typical spending patterns of New Zealand households
- the FPI is an important indicator of inflation in New Zealand, as food prices account for a significant portion of household expenditure
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Yesterday we had comments of relevance to inflation:
The monthly fall in New Zealand’s Food Price Index will be welcomed by the Reserve Bank of New Zealand as it offers tentative evidence that one of the stickier components of inflation may be starting to ease. Food prices account for nearly a fifth of the CPI basket, meaning even modest declines can have a meaningful impact on headline inflation outcomes.
For the RBNZ, food inflation has been a persistent challenge over the past two years, driven by global supply shocks, higher input costs, weather disruptions and elevated margins across parts of the food supply chain. While annual food inflation remains elevated at 4.4%, the second consecutive monthly decline suggests price pressures may be losing momentum at the margin.
This easing is particularly important given the Bank’s focus on bringing inflation sustainably back within its 1–3% target range without inflicting unnecessary damage on household demand. Food prices are highly visible and politically sensitive, and sustained moderation would help alleviate cost-of-living pressures for households already strained by high mortgage rates.
From a policy perspective, softer food prices support the case that restrictive monetary settings are working their way through the economy. While the RBNZ is unlikely to pivot quickly on the back of a single data point, continued downside surprises in food inflation would strengthen confidence that broader disinflation is becoming entrenched, allowing policymakers greater flexibility over the medium term.
