By Stephen Wright
WELLINGTON, New Zealand–New Zealand’s government has extended measures aimed at providing relief from fast-rising consumer prices, but warns that inflation will remain high for some time.
A reduction in gasoline tax that was implemented in March has been extended until the end of January next year. Half price public transport fares and a reduction in road user charges have also been extended for the same period.
The government measures were announced ahead of New Zealand’s inflation report for the April-June quarter, due Monday. Economists expect an inflation rate of 7.1%, which would be a new three-decade high.
“Even though many commentators are forecasting that inflation will peak in the June quarter, it is likely to stay for some time at levels higher than we have seen in recent years,” Finance Minister Grant Robertson said in a statement.
Inflation has soared globally during the Covid-19 pandemic, fueled by monetary stimulus and increased government spending, global shipping disruptions and Russia’s invasion of Ukraine. Central banks are aggressively raising interest rates to tame price increases, but risk tipping economies into recession.
New Zealand’s Treasury Department estimated that the government measures would reduce the inflation rate by half a percentage point in a three-month period.
“Inflation is rising across the world, and cost of living pressures are making it tough for New Zealand right now,” Mr. Robertson said. “High fuel prices, particularly driven by the impact of the Russian invasion of Ukraine, are a global problem affecting households and businesses in New Zealand.”
Write to Stephen Wright at [email protected]
Credit: www.marketwatch.com /