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Cheap fruit offsets pricier dinners: Stats

NZ Newswire logoNZ Newswire 10/08/2017 Paul McBeth
Avocado prices have dropped. © Justin Sullivan/Getty Images Avocado prices have dropped.

New Zealand food prices were unchanged last month as the cost of dining out got more expensive, offsetting cheaper fruit.

The food price index was flat on a seasonally adjusted basis in July, holding the annual increase at 3 per cent, Statistics New Zealand said.

That was due to a 2.4 per cent monthly decline in fruit prices, led by hefty drops in the price of avocados and strawberries, balancing out a 0.7 per cent increase in restaurant meals and a 4.6 per cent jump in the price of hot drinks such as coffee and tea.

"Strawberries are unseasonably cheap for this time of year," consumer prices manager Matthew Haigh said.

"They typically reach their lowest price in December, but are currently dropping in price due to more imports from Australia."

Food prices account for about 19 per cent of the consumers price index, which is the Reserve Bank's mandated inflation target when setting interest rates.

A spike in food prices and a recovery in oil prices earlier this year led to a jump in inflation, which has been subdued in recent years.

However as those movements flatten out the pace of CPI increase is expected to slow in early 2018, the Reserve Bank said on Thursday.

Annual CPI of 1.7 per cent in the June quarter was also below expectations.

Friday's figures show more expensive produce was driving the annual increase in food prices, with fruit and vegetable prices rising 8.2 per cent in July from the same month a year earlier.

Grocery food prices rose an annual 3.1 per cent, due largely to the global recovery in dairy prices driving a 7.6 per cent increase in prices for milk, cheese and eggs.

Mr Haigh said dearer vegetables and dairy products were probably behind the 2.5 per cent annual increase in restaurant prices.

Consumer spending on hospitality was buoyed earlier this year by visitors accompanying the British & Irish Lions rugby tour, and figures this week showed that spending tapered off in July.

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