CPI figures highlight global economic challenges

Further increases in consumer prices are a reminder of the current global economic challenges and the need for responsible fiscal policy in New Zealand, Grant Robertson said today.

The Consumer Price Index released today by Stats NZ showed a 1.8% increase in prices in the March quarter, bringing the annual inflation rate to 6.9%.

“These are tough times for the global economy with significant increases in food and fuel prices hitting all nations. Inflation has hit a 40-year high of 8.5% in the United States and a 30-year high of 7% in the UK Chinese ports have been closed for long periods of time, adding to supply chain disruptions New Zealand cannot be immune to these challenges and the government cannot control the price of food or gasoline,” said Grant Robertson.

“But the reality is that for many families the pressure of these high prices is real. We are well placed to meet this challenge. Unemployment is at an all-time high, exports are up, and the economy is growing and helping to contain debt, which is well below those of the countries we benchmark against.

“This strong base means we have taken the pressure off New Zealanders. We took immediate action on fuel prices by reducing fuel excise duties by 25 cents per litre, saving up to $17 per refill and cutting public transport fares in half. We have provided significant support to families, seniors and students and the Winter Energy Payment comes into effect on May 1.

“We are also focusing on how we can get to the root causes of certain price increases. We are committed to taking action to stimulate competition in the New Zealand grocery market to ensure Kiwis get a fair price. We are also taking action to reduce our dependence on oil by decarbonizing our transport fleet, through initiatives such as the Clean Car Discount.

“There is no silver bullet to deal with a situation like this. The Reserve Bank is tasked with managing inflation in our system, and it is using its tools to try to bring it back into the target range of 1-3% over the medium term. Most economists now expect inflation to peak in the second quarter of the year and then start to come down.

“We continue to take a prudent and balanced approach to our future spending. There are always more calls to spend than we have the money to answer. So we continue to focus on meeting basic needs in health, education, housing, and investing in the skills, infrastructure and industries we need to create better-paying jobs.

“Our economic recovery is accelerating. We are reopening to tourists and workers as part of the next leg of this journey. The Prime Minister is leading a number of trade missions to reconnect with key trading partners to support our economic reconstruction. Much more needs to be done, but we are moving in the right direction and I am focused on a balanced approach to sustainably investing in New Zealand’s long-term prosperity while carefully managing our spending,” said Grant Robertson. .

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