18 Oct 2022

Inflation numbers reflecting tight labour market - Economist

From Morning Report, 7:12 am on 18 October 2022

New Zealand's inflation rate is expected to show its first decline in nearly two years today - but an economist warns price pressures are going to prove hard to quell quickly.

The Consumer Price Index is expected to have risen by 1.6 percent in the three months ended September - driven by high food prices, building costs and household expenses.

However, the fall in fuel prices means the annual rate is expected to drop to around 6-point-6 percent from a 32-year high of 7.3 percent.

ASB senior economist Mark Smith told Morning Report that core inflation, which is domestic, is sticky - reflecting a tight labour market.  

He said the country lacks enough workers.