Wholesale Inflation stands at 2.47% in March; manufacturing index rises

Mae Love
April 16, 2018

Inflation based on wholesale prices eased to an eight-month low of 2.47 per cent in March on cheaper food articles, including pulses, vegetables and eggs.

New Zealand's annual pace of inflation probably slowed in the first three months of the year as the government's "fees free" tertiary education policy comes into effect, removing price pressures in the sector. The index for "Manufacture of Wearing Apparel" sub-group declined by 0.9 per cent to 137.8 from 139.0 for the previous month due to lower price of woven apparel, except fur apparel, and knitted and crocheted apparel (1 per cent each).

Food and beverage prices were 0.9 per cent up, on an annual basis, while the price of utilities and housing has increased by 4.6 per cent and transportation costs were 0.7 per cent higher compared to a year earlier.

The data disclosed that prices of food articles dipped by (-) 0.29 percent from an acceleration of 0.88 percent in the previous corresponding month. "We expect the average WPI inflation to rise to around 3.9 per cent in 2018-19 from 2.9 per cent in 2017-18", Nayar said.

The index for fuel and power declined by 0.1 per cent to 98 (provisional) from 98.1 (provisional) in February.

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Product-wise, the price of high-speed diesel rose by 6.12 per cent during March while that of petrol climbed by 2.55 per cent and for LPG by (-) 9.08 per cent. It revised downwards forecast for retail inflation to 4.7-5.1 per cent for April-September and 4.4 per cent for October-March.

As per CSO data, inflation in the vegetables segment cooled to 11.7 per cent in March from 17.57 per cent in the previous month. The movement in core inflation at the retail and wholesale level were in the opposite direction in March 2018.

The inflation based on Consumer Price Index (CPI), a key data factored in by the RBI to arrive at interest rate, was 4.44 per cent in February. "Inflation in the food article category which has been declining since November 2017 turned into deflation in March 2018 mainly driven by the sharp correction in the prices of fruits and vegetable".

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