Food prices rise 0.8 p.c.

Press, 12 October 1988, Page 1

Food prices rise 0.8 p.c.

By

BRENDON BURNS

in Wellington Financial commentators were still holding yesterday to predictions of an inflation increase of about one per cent or less for the September quarter, after the release of the latest food price index. During September, the cost of food rose 0.8 per cent. Food is estimated to be likely to contribute 0.17 per cent to the consumers’ price index quarterly figure to be released on Friday.

Predictions of the C.P.I. result range from about 0.6 per cent to one per cent for the quarter.

The Institute for Economic Research said it was still holding to its forecast of an inflation result for the September quarter of about one per cent. September’s food price result did not provide any evidence of a need to revise the forecast, said an institute economist, Mr Stan Vandersyp. The stockbroking firm, O’Connor Grieve, Ltd, said it had no cause to review its inflationary prediction of 0.6 per cent. The 0.8 per cent food price increase in September was made up mainly from rises in the cost of bananas, some vegetables and meat, milk, bread, and restaurant and takeway food. It followed a 0.3 per cent rise in August, a 0.1 per cent drop in food prices in July and a 0.8 per cent increase in June.

The Statistics Department, which gave the September figure, said normal seasonal fluctuations for fresh fruit and vegetables did not influence the food price index.

Welcoming the result, the Minister of Finance, Mr Douglas, said it showed that the underlying trend in food inflation was still declining. The increase of 0.8 per cent had partly reflected the world commodity boom in beef and dairy products, he said. Mr Douglas made no comment about how the food price result might indicate the quarterly inflationary figure,