Liam Dann: NZ Herald Business Editor on the inflation rate rising to 2.5%

Inflation is officially on the rise again. 

The latest Stats NZ figures show the Consumers Price Index rose 2.5% in the year to March – up from a 2.2% rise in the year to December. 

The numbers cover the 12 months to March 31, and don't reflect the impact of Donald Trump's new tariffs and other new trade barriers. 

NZ Herald Business Editor Liam Dann told John MacDonald that despite the increase, economists are reasonably confident the Reserve Bank will be able to continue cutting interest rates. 

He says the economy is very slow, so they’re expecting non-tradable inflation to continue going down.  

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerry Wood and Morning's podcast from
News Talks. He'd be so.

Speaker 2 (00:12):
Inflation is officially on the rise again. The latter stats
from stats n Z show that the consumer's price index
rows two point five percent in the year to March.
That's up from two point two percent in the year
to December. The New Zealand Herald's Business editor at large
Liam dan is with us to unpack it all. Good
lem good it John. Your reaction, you're surprised.

Speaker 3 (00:35):
Yeah, look, not not too surprised. I think slightly more
than would have hoped. We would have hoped that the
picks were for about two point four, so it's coming
at two point five. And rents seem to be a
bit of a driver. You know, council rates have been
a big driver. And we know that food prices have

(00:58):
been up in the past year two boom, which is
good for our farmers and economy. But back when you're
at the supermarket, so you know, cheese and milk and
butter all up a lot. So that's that's not great
for people's pockets obviously. But I guess I guess the
issue is you've got two parts of the inflation equation,

(01:19):
and some of the stuff like the food prices is
not expected to sort of stick around, hopefully for too long.
Although I guess we don't know how the tariff tariff
situation plays out. But we have seen petrol petrol prices
coming down in the past a couple of weeks, so
the starter is through to the end of March, so
we haven't you know, haven't seen those you know, too

(01:39):
much of that petrol drop yet. And what's happening is
because the economy is still very slow, economists are reasonably
confident that the non tradeable end of inflation will continue
to keep coming down. So I think even though that
this doesn't look good, there's there's reasonable confidence that the
reserve band will be able to keep cutting interest.

Speaker 2 (02:01):
Rates, because when it comes to the inflation stats, it's
almost like we'll tell us something we don't know because
of its retrospective, because of its retrospective nature, and I
can't imagine too many people will be surprised with us.
In fact, some people might even think, oh, that's lower
than I thought it might have been. Even though the
experts were talking around this mark, you've kind of touched
on what it says about the future, But can we

(02:22):
broaden that What do you think this says about in
the next six to twelve months for you and I
and every time other time to can Harry.

Speaker 3 (02:30):
Well, it's kind of going to be a bit confusing
and conflicting because really the story that we're getting now
is that the recovery is faltering on, you know, confidence.
So we saw consumers weren't spending in the last card
data survey for March, you know, the consumer spending was down,

(02:50):
So economists, you know, it's very hard to know about
commodity prices and things because of all the chaos on tariffs,
but the domestic economy just isn't strong, and I think
there's a feeling that that part of the equation equation
will keep coming down and that you know, the costs
of you know, I guess I guess it's the stuff
like getting getting trades in and plumbers and you know,

(03:13):
doing business in New Zealand is getting cheaper. Unemployments continuing
to rise for some time, so you know that there's
not that wage pressure that there was, So you know,
in some ways one would hope that this is a
bit of a last last sort of splutter of inflation.
There is there is some risk around international commodity prices

(03:35):
and things with the tariffs. But then there's also people saying, well,
actually we could get a lot of cheap goods coming
our way from China. They're not They're not welcome in
America anymore. So, you know, there's a lot of variability there.
But I don't think the Reserve Bank or the economists
that we're panicking about inflation yet. I know it's that

(03:56):
will feel very acutely every week when we go to supermarket.
But you know, i'd be optimistic that it rising back
into the sort of that they're really worrying we saw
a year or two ago.

Speaker 2 (04:09):
Okay, there's always two sides to this, one size the data,
the other sides of the politics. How does the government
come out looking from this result today?

Speaker 3 (04:18):
I think I think that in their policies or inflation
on the way down. There's a bit skeptical of that.
I think, you know, a lot of this is outside
of the government's control.

Speaker 1 (04:30):
Really.

Speaker 3 (04:30):
You know, dairy price is pushing up the price of
cheese and butter, well, that's that's to do with demand
out of China and all that sort of stuff. There's
the new Zealand dollar during this period pushes up the
price of import So yeah, I mean governments have too
much when some of this economic data goes their way.

(04:51):
Because it doesn't go their way, I guess that would
make them to blame. But I think this is, you know,
more or less outside of the government's control.

Speaker 2 (05:00):
All Right, Nice to talk to you, Lem Dan, new
Zealand Herald's Business editor at large.

Speaker 1 (05:05):
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