ASB has predicted that the cost of living crisis will see Kiwis being forced to spend an additional $110 per week. The average figure takes into account inflation and higher interest rates.
“Of the approximate $110 weekly increase in household living costs in the June 2023 year, around two-thirds of those would either be non-tradeable goods/services or debt servicing,” said Mark Smith, Senior Economist at ASB to the NZ Herald.
“The surge is likely to be sustained given a limited buffer on current spending, the sharp slowdown in population growth, slowing residential construction activity, and a housing market still trying to find its feet,” he continued to the NZ Herald.
ASB has also predicted that the Official Cash Rate will rise from three percent to 4.25 percent but hopes that the increasing incomes due to a tough labour market will mitigate this.
The economy could continue to surprise as wage growth could be sustained by limited labour productivity.
