Wednesday, April 9, 2008

Rising prices put squeeze on New Zealand budgets

Applications for hire purchases were down 52 percent and applications for personal loans were down 12 percent in the first quarter of 2008, credit reporting agency Veda Advantage said today.

"Rising fuel and food prices, coupled with high interest rates, are putting the squeeze on household budgets," Veda's country director John Roberts said.

"Our figures show a 33-percent increase in the outgoing cash flow of the average household over the last couple of years.

"It is not surprising to see applications for hire purchases and personal loans drop off to such an extent as household expenditure stresses kick in."

  • Food prices in New Zealand rose 9 percent in the year to February 2008, and Westpac chief economist Brendan O'Donovan says there is more pain to come for consumers. China, India and other emerging economies are driving up demand for meat and dairy products, while the increased demand for biofuel is sending grain prices soaring and reducing available arable land.

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