Inflation drop for N.Z. in third quarter

Press, 29 December 1988, Page 9

Inflation drop for N.Z. in third quarter

PA Wellington Next time you complain about the rising cost of groceries spare a thought for the people of Nicaragua — in the year ended September their prices rose 3921.6 per cent. That compared with New Zealand’s inflation rate of 5.6 per cent for the same period. The rises were revealed in the International Monetary Fund’s December financial statistics. New Zealand was one of only three industrial countries where inflation fell in the third quarter of 1988, the I.M.F. reported. The other two countries

to curb price rises were Denmark and Sweden. The average yearly inflation rate for industrial countries rose 3.3 per cent to September, compared with 3 per cent to June. Many economists are picking New Zealand’s inflation rate to drop below 4 per cent by March, which would put it in the lowest inflation bracket. But there is still a long way to go to catch up with Japan, where prices rose only 0.6 per cent to June (0.2 per cent previously), and West Germany with 1.2 per cent (1 per cent).

New Zealand is however catching up with the

United States, where prices lifted 4.1 per cent to September (3.9 per cent).

Against developing Asian neighbours New Zealand compared favourably, with their average rate rising to 5.9 per cent from the previous quarter’s 5.1 per cent. The inflation gap between developing and industrial countries continued to widen.

The average inflation rate for developing countries rose to 63.1 per cent from 58 per cent. In the Western hemisphere the rate increased from 192.2 per cent to 198.5 per cent