Rising costs are expected to dominate the national conversation this year, even as Covid hasn't yet said all it has to say.
Herald business editor at large Liam Dann reminded us this week it's been building as an issue since the pandemic first shut down ports and factories in March 2020.
In New Zealand, the last official figure has annual inflation sitting at 4.9 per cent - but it is tipped to be closer to 6 per cent by now. In the US it's already set in; annual inflation is at 6.2 per cent - the highest level since 1982.
NZ Initiative chief executive Oliver Hartwich says it is still unclear whether this is temporary or more persistent. "There are of course many different measures for inflation, both here and overseas, and I wouldn't want to single out one of them. It's a global phenomenon, so let's watch this play out globally in all its forms."
Hartwich says the first figure to watch is shipping costs. New Zealand's place in the world means any predicted normalisation to supply chains will take longer to be felt here.
ANZ chief economist Sharon Zollner adds port wait times to the watchlist, as further delays would compound shipping costs.
Other economists are monitoring domestic conditions, particularly wages in a tight labour market. Wages tracking upwards to chase inflation could spin the economy into a perpetuating spiral.
BNZ head of research Stephen Toplis predicts the labour market is likely to be the dominant source of inflationary pressure over the next year.
Government spending - notably, of course, the $55 billion Covid Response and Recovery Fund - also raises concern. Yet the three largest areas of Crown expenditure for the 2019/20 financial year can hardly be faulted: Social security and welfare ($49.9 billion; health ($20.5 billion); and education: $17.6 billion.
Inflation is only likely to increase pressure on Government spending in welfare as rising food prices are now impacting on the lives of our most vulnerable, pushing demand for food bank support. Kiwibank chief economist Jarrod Kerr points out inflation hurts those on lower incomes more than it does those on higher incomes because they spend a greater proportion of their money on necessities.
Even more New Zealanders are likely to be hit by the inflationary impact on interest rates. Mortgage rates are already climbing. Meanwhile, Westpac chief economist Michael Gordon expects a turn to moderate price declines in the property market by the second half of the year.
Any such decline, however, is likely to be in the sectors of the market where returns are the least, if not marginal. Increasing divestment in low-yielding rentals is likely, as new housing supply and measures particularly targeted at property investors should provide headwinds to house prices.
All of this points to a rigorous squeeze on wallets this year. How much it hurts will depend on how well household debt has been managed, and how close spending is controlled. Younger New Zealanders or those who have forgotten austere times may be in for an education.