Economic Week - August 17

 
Food prices up

Higher vegetable prices pushed food prices up 0.7% in July according to Statistics NZ’s monthly Food Price Index:

• Fruit and vegetable prices rose 2.4%, with vegetables up 9.2% more than outweighing a 7.9% drop for fruit.
• Meat, poultry, and fish prices rose 0.1%, with beef and veal down 1.2% but mutton, lamb and hogget up 1.3%.
• Grocery food prices rose 0.3%, with bread and cereals down 0.5% and milk, cheese and eggs up 1.7%.

On an annual basis, food prices were up 1.1%:

• Fruit and vegetable prices fell 1.4%, with vegetables unchanged and fruit down 3.5%.
• Meat, poultry and fish prices rose 0.3%, with beef and veal up 1.0% and mutton, lamb and hogget up 9.6%.
• Grocery food prices were unchanged, with bread and cereals down 1.3% and milk, cheese and eggs down 0.8%.

Fresh food prices (especially fruit and vegetables) can be volatile due to factors like the weather.  However, over recent times restaurant meals and ready-to-eat food (e.g., takeaways) have increased steadily, probably a reflection of higher costs for these establishments, including a higher minimum wage.  For the year to July 2018 its prices increased by 3.2%, nearly three times the rate for food prices as a whole.

Closing on 5 million

New Zealand’s population was 4,885,300 as at 30 June 2018, according to Statistics NZ’s annual National Population Estimates.  This was up 91,500 (or 1.9%) for the year, with net migration the main contributor (65,000) over natural increase (26,500). 
Although 1.9% is a strong rate of population growth by historical standards and by international standards, reducing net migration is slowing it down (2017’s increase was 2.1%).
Even if the rate of population growth slows further, New Zealand’s population should exceed 5 million in either 2020 or 2021.  New Zealand's population reached 1 million in 1908, 2 million in 1952, 3 million in 1973 and 4 million in 2003. 

NIWA Soil Moisture Data
NIWA’s latest soil moisture maps (as at 9am Thursday 16 August) continue to show most of the country around average for this time of year.  Coastal Marlborough and East Otago are a little wetter than usual.

Exchange Rates

Overall the TWI was down slightly for the week.  The NZD was down against the USD and the JPY, up against the AUD and the Euro, and broadly stable against the GBP and RMB.

Source: Reserve Bank of NZ

Wholesale Interest Rates

Although 90-day rate was relatively stable over the week, the 10-year rate was down.

Source: Reserve Bank of NZ