Inflation down to 10%?

Press, 11 October 1976, Page 1

Inflation down to 10%?

PA Auckland Even with a rise in the price of oil at the end of the year, it looked as if the Government, with careful management, would be able to bring the rate of inflation down to 10 per cent or less, said the Prime Minister (Mr Muldoon) last evening. The threat of an- oil price-rise was very real, because the member nations of the Organisation of Petroleum Exporting Countries had talked of a meeting about December with a view to an Increase in oil prices.

However, Mr Muldoon—home in Auckland again after attending the annual meeting of the World Bank and International Monetary Fund at Manila—said that the increase need not be a big one. “There was some suggestion that they have a policy of raising oil prices in line with the rate of inflation internationally,” he said. “If this is so, then the opinions expressed at the Manila meeting were of a generally much lower rate of inflation in the industrial countries next year than we have experienced so far.”

That was still questionable, Mr Muldoon said, but he feeling at the meeting was more optimistic than earlier in the year, when a new round of inflation next year had been foreseen. New Zealand must be worried about any oil pricerise because oil fuel and products based on oil had a significant effect on the New Zealand economy at consumer price level, he said. Mr Muldoon was pleased with the latest 3.2 per cent consumer price index of retail figures. “If we look ahead, the

first quarter of next year will be a good one,” he said. “This 3.2 per cent, properly analysed, is very' good news in terms of the contimrng position with regard to inflation.

“If we get an oil pricerise, say, in December, it will start to affect us but it might not even hit the first quarter next year (mid-February),” said Mr Muldoon.

“So it looks as if, with careful management, we can get the rate of inflation from now on to a much more reasonable level than we have had for the last 12 months,” he said.