A silver lining for fruit and vegetable lovers
A leading economist suggests a silver lining as fruit and vegetable prices gradually become more affordable.
In a recent interview with AM, Infometrics principal economist Brad Olsen (pictured) shed light on the improving landscape of consumer expenses. Despite acknowledging that prices remain “flipping expensive,” Olsen offered a glimpse of optimism for Kiwis grappling with the enduring cost-of-living crisis.
According to Newshub, New Zealanders have faced escalating costs of living over the past two years, characterized by soaring inflation rates and unprecedented hikes in food prices. Notably, the country teeters on the brink of another recession following a 0.3% decline in gross domestic product in the third quarter of 2023.
However, recent data reveals a potential alleviation of pressure on household budgets. Annual inflation dipped to 4.7% in December, marking the first time since September 2021 that it fell below 5%.
According to Stats NZ, annual food price inflation settled at 4.8% in December, a figure expected by ASB to drop below 3% by mid-2024. Olsen’s insights offer a glimmer of hope, particularly for fruit and vegetable enthusiasts, as prices hint at normalization in the coming year.
“I think we’re starting to get through some of those big challenges that have persisted over the last two years with higher inflation, which of course has hit everything but in particular we’ve been seeing food prices in general getting really expensive,” Olsen told AM.
He noted the recent developments indicate a noteworthy comeback of the seasonal pattern, highlighting the fall of fruit and vegetables prices by 6.4% in the fourth quarter.
“We hadn't seen it in a while and that means that overall fruit and vegetable prices in New Zealand at the end of last year, they had increased 3.3%,” said Olsen. “That was the smallest annual increase since COVID-19 hit back in March 2020.
“Depending on what you’re putting on your sandwiches, if you’re putting avocado and tomato on, you’re probably in a better position,” Olsen said, noting that avocado and tomato prices have witnessed notable drops, with avocados down by 25% year-on-year and tomatoes by approximately 41%.
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