In my previous article back in February, I set the scene for what I hoped would be a brighter year ahead for the economy, businesses and households, but unfortunately as we’re over a third of the way through the year, my scene-setting appears to have been a little over ambitious. The ongoing geo-political tensions, over which we have absolutely no control, have served to derail and stifle our economic growth whilst at the same time adding to our cost of living woes. 

With the price of petrol and diesel soaring and more businesses looking to pass on some of their increased costs to consumers, any financial relief for many thanks to a reduction in interest rates has been short-lived, with interest rates creeping up again in recent weeks. In April, the Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) at 2.25% whilst also noting that the RBNZ expected inflation to increase and the economic recovery to weaken in the near term. Indeed, due to global supply chain disruption leading to significantly higher prices for oil and refined petroleum products, the RBNZ now expects the Consumer Price Index (CPI) to peak at 4.2% in the June quarter.
The ongoing uncertainty regarding the length of the conflict in the Middle East means that, like the RBNZ, most economists’ predictions are given with a caveat that any prediction is subject to change if the conflict continues. Unfortunately, the longer it goes on, the worse the economic effects on New Zealand will be, so hopefully by the time this article goes to print, the outlook will already be more positive due to a cessation of the conflict.
With unemployment in Auckland still above the high national average and the cost of the weekly food shop continuing to climb on top of prices at the pumps, the financial and economic challenges facing businesses and households show no signs of easing, as we all find our own way to deal with the situation. There’ll also be more pressure put on our budgets in July, when Auckland Council rates are proposed to increase by 7.9%, with Watercare rates also proposed to increase by a similar amount. 
With a General Election looming later this year, the different political parties will be trying to convince us that voting for them will bring about a positive upturn in the economy and in our lifestyle in general. Regardless of individual political affiliations, I sincerely hope that whoever governs the country is right and at some stage in the not-too-distant future we can all enjoy a less challenging economic climate. 
In closing, I would again ask you to keep supporting our local businesses whenever you can. 
 
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