Why is inflation an issue right now?
The world we live in is a lot less certain than it was a few years ago, and as we’ve talked about in previous blogs – uncertainty tends to have a negative effect on the financial world.
We’ve got a war in Europe, we have the property market slowing down, and we have a once in a generation pandemic in the form of Covid. All of these factors contribute to rising inflation.
Covid is not only stopping people from being productive in New Zealand, it’s also strangling global supply chains particularly given the lockdowns it’s still causing in China. The war in Ukraine has further restricted global supply chains as well as created worry about the supply of things like natural gas and even grain. These restrictions on the flow of goods naturally push the price up of the ones we can access in New Zealand.