Expected damage to New Zealand's economy from severe weather over the past three weeks has prompted financial markets to downgrade the outlook for interest rate rises.
When Cyclone Gabrielle hit, picking had just begun on pip-fruit farms, whose production is worth about NZ$1 billion a year. Now the industry has lost not only 2023 product but many orchards are still inaccessible.
"This will be a significant event financially for the government and for individuals, households, businesses, banks and insurers," he said.A surge in prices looks likely from the disruption. Economists expect inflation, already running at a near three-decade high of 7.2%, to rise as the country replaces homes and contents and repairs infrastructure. Loss of crops will push up food prices.
Still, Kiwibank chief economist Jarrod Kerr said the central bank should pause hikes until the effect of the cyclone can be understood.
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