Statistics NZ says food prices rose 0.6% in April, while international airfares surged 7.2% and rentals continued to rise strongly

Food prices rose for the first time in three months in April, forced up by higher prices for olive oil, potato crisps and and chocolate blocks.

The olive oil price in April was $18.57 per litre, up some 10.5% on the $16.80 price in March.

Meanwhile, the ever-volatile international airfares rose by 7.2%, while rental accommodation costs are continuing to rise fairly strongly.

ANZ economist Henry Russell and chief economist Sharon Zollner said while the overall pricing data was "on the stronger side of expectations", the miss was not significant enough to alter their view of the outcome of the June quarter inflation figures (they see a 0.5% quarterly rise and 3.4% annual rate)  "and we remain confident that headline inflation will be back within the RBNZ’s 1 - 3% target band in Q3 this year."

ASB senior economist Kim Mundy said consumer prices generally ticked higher in April. Quarterly price rises remain higher than what is required to be consistent with the RBNZ’s 1-3% inflation target, she said.

"At this stage, we continue to expect CPI inflation to fall below 3% by year-end. However, there is a risk that this takes longer than expected, given evidence of stickiness in some of today’s data. Despite consumers doing it tough, there were still sizeable monthly price rises in certain categories," Mundy said.

Statistics NZ said in April food prices rose 0.6%. This followed a 0.5% drop in food prices in March.

On an annual basis, the latest increase brought the overall rise in food prices for the past 12 months up to 0.8% compared with 0.7% as of March.

At the same time a year ago, food prices had increased by some 12.5%.

Discussing the monthly figures, Stats NZ's consumer prices manager James Mitchell said the fruit and vegetables group slightly offset the increased prices, with cheaper prices for kiwifruit, broccoli, and mandarins.

“Stocking up with fruit and vegetables became cheaper for the third consecutive month,” he said.

“At the same time, filling up the fridge and pantry with other food items, and heading out to a cafe or restaurant became more expensive.”

In terms of the annual picture, he said the smaller increase compared with last year was due to cheaper fruit and vegetables, down 13 percent in the 12 months to April 2024, while all other broad food groups increased in price.

“The fall in fruit and vegetable prices, compared with April 2023, reflects prices coming down from highs seen throughout 2023,” Mitchell said.

“Tomato prices were more typical for April – about $3.50 cheaper per kilo than what they were this time last year, while kūmara prices have more than halved since the start of 2024," Mitchell said.

This is all according to the latest monthly release of Selected Price Indexes (SPI) by Stats NZ.

The SPI late last year replaced Stat's NZ’s previous monthly releases for food prices and rents and alongside those monthly indexes, they now also publish indexes for petrol, diesel, alcohol, tobacco, airfares, and accommodation.

Stats NZ's Selected Price Indexes incorporate about 45% of the Consumers Price Index (CPI). The SPI isn't meant to replace the CPI – which still comes out every three months – but is meant to give preview information about inflation.

Economists have found the new SPI information very helpful as it captures quite a lot of the elements in the CPI that are more volatile in nature.

This includes the earlier-mentioned airfares.

As stated higher up, prices for international air transport rose 7.2% in April 2024 compared with March 2024. However, prices for overseas accommodation were down 4.9%.

“Kiwis travelling overseas in April would have experienced higher airfares than those who travelled in March,” said Mitchell.

“On the flip side, the prices for their accommodation were cheaper.”

International air transport prices were 47.7% more expensive than five years ago, in April 2019, while prices for overseas accommodation were 30.8% more expensive over the same time.

In terms of rental costs, Stats NZ said the 'flow' measure of rentals (which is for new tenancies) rose just 0.1% in April. But this is a volatile figure.

The 'stock' measure of existing tenancies showed a 0.5% rise, which was higher than the 0.4% rise in March. The massive surge in migration is helping to fuel the rising rental costs.

The annual rate of increase of stock rentals was 4.6%, same as in March, while the 'flow' increase was 4.2%, down from 5.1% in March.

Rentals make up about 9.5% of the CPI figure, so are very significant and they are continuing to rise at a rate that is higher than the most recent annual CPI figure, which was 4.0%.

Here is the detailed SPI information as supplied by Stats NZ: