In a new series, Inflation Nation, the Herald is focusing on the rising cost of living. The series looks into the reasons and impacts of the price quake - and possible solutions.
New Zealand isn't alone in dealing with these issues, which are hitting Kiwis with high prices for goods, groceries, and fuel on top of rental hikes and increased interest rates.
Yesterday, New Zealand's Government responded by reducing both fuel excise duties and road charges by 25c a litre, as well as halving public transport fares for three months.
The cost of food was hit by Covid and extreme weather events before the conflict in Ukraine.
Stats NZ said last week that annual food prices had risen by 6.8 per cent in February compared with 12 months earlier. It was the largest annual increase since July 2011 when prices increased by 7.9 per cent.
Individual price rises included: fruit and vegetables up 17 per cent; grocery food up 5.4 per cent; restaurant and ready-to-eat meals 5.2 per cent; and meat, poultry, and fish 7.1 per cent.
New Zealanders have already seen fairly high petrol prices in recent times and the trend of working from home during the pandemic has partly shielded some from higher transport costs. But the latest spike in fuel prices has meant filling up the car costs well over $100.
Russia's invasion of Ukraine directly impacts oil, gas and wheat production through sanctions and disruption. That could well result in more political instability in the world and humanitarian crises with hunger in poor countries.
Overseas, Ireland has temporarily relaxed its fuel taxes to ease pain at the pump.
France, which is just weeks away from its presidential election, is offering drivers a rebate, which would amount to $14.45 off the price of filling a 60-litre fuel tank. It would apply for four months from April 1 and would cost the Government at least $3.2 billion.
President Emmanuel Macron's Government has previously imposed a limit on electricity and gas hikes of 4 per cent and offered low-income households a one-off $160 energy voucher.
Last week ANZ economists forecast that inflation in New Zealand would peak at 7.4 per cent. That level hasn't been reached since 1990.
Inflation has been building for about a year and has become the new political battlefield. It complicates the country's challenge in dealing with other important issues such as climate change. A swift end to the war in Ukraine would help but that could well be wishful thinking. There is hope that the pandemic will become more manageable over this year, but it may not.
Just as we buffered our most vulnerable as best as we could from Covid, efforts will be needed to help communities through the austere days ahead.
