Food prices levelled out last month but still had their biggest year-on-year increase in more than a decade.
Photo: 123rf
Figures from Stats NZ show food prices in February fell fractionally on the month before (0.1 percent) as cheaper fresh fruit and vegetables and groceries offset rises in meat and takeaways.
Prices had surged 2.7 percent in January, driven by fruit and vegetable prices in particular.
But annual food inflation increased to 6.8 percent, the highest since July 2011, when prices rose 7.9 percent.
Fruit and vegetable prices were the main driver of the annual rate. Compared to the same month last year fruit and vegetable prices jumped 17 percent.
"Fruit and vegetable [price rises were] mainly influenced by tomatoes, broccoli, and iceberg lettuce," Stats NZ food prices analyst Angus Crowe said.
The steady rise in global dairy prices was reflected in an 8.9 percent rise in the price of cheese and milk.
Food prices make up nearly a fifth of the consumer price index, and the strength of increases has prompted another major bank to raise its overall inflation forecast.
ASB Bank said it now expects annual inflation to hit 7.5 percent by the middle of the year, the highest since 1990.
"We expect higher food and fuel prices alone to add $40 of costs to the average weekly household budget over 2022, adding to the squeeze facing the household sector," senior economist Mark Smith said.
"Many households will cop a larger hit."
