Analysts at KiwiBank note today.
Painful inflation is a global problem. Inflation is proving to be much more persistent and widespread. The war against inflation will continue to heat up. But there has been a positive development – shipping costs are falling. And capacity is increasing with more ships.
Global shipping costs were one of (the many) catalysts for rapidly rising inflation during the pandemic. The sharp fall in shipping costs, and easing of pressures on supply chains, will be a welcome development for importers and exporters.
We expect to see a sharp fall in tradables (imported) inflation into next year. But non-tradables (domestic) inflation will prove to be more difficult to contain.