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Bernard & Jarrod: Deflation is the bigger risk
WATCH: Bernard Hickey talks with Kiwibank chief economist Jarrod Kerr about March quarter inflation figures that were slightly above expectations, but were mostly set before the Covid-19 lockdown. They discuss the prospects for deflation, and why the Reserve Bank is buying bonds to keep interest rates extremely low for much longer
Bernard talks with Jarrod Kerr about Statistics NZ data released on Monday showing the Consumer Price Index rose 0.8 percent in the March quarter, which drove the annual inflation rate up to 2.5 percent. They talk about the rises in cigarette taxes and rents that were responsible for a large portion of the rise, and the rise in tradable prices due to a lower currency.
However, these prices were set and measured well before the beginning of the Covid-19 lockdown, which is expected to exert downward pressure on many prices ranging from rents to retail goods and petrol.
Bernard and Jarrod then talk to Newsroom report Marc Daalder about a proposal for a 'CovidCard' for tracing contacts of Covid-19 patients, which would see a bluetooth card be given to all New Zealanders so health workers could easily and quickly trace contacts of fresh cases.
That would avoid economically painful yo-yo-ing back into Level 4 lockdown.
This is part of a daily 'Bernard and Jarrod Zoom out for Lunch' webinar series during the lockdown.
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