Inflation is expected to hit a 30-year high in the final quarter of 2021, and continue to put pressure on the New Zealand economy throughout 2022 according to one bank.
In its 2021 Q4 CPI preview report ASB predicts a 1.6 percent increase, lifting inflation for the year to 6.1 percent - the highest in 30 years.
The bank predicts this "is likely to firm over 2022 and remain well outside the 1-3 percent range."
Not only does this mean Kiwis will see the cost of everyday goods continue to rise, it will also put pressure on the Reserve Bank to increase the OCR.
"A relentless stream of price and cost rises from a multitude of domestic and external sources has resulted in us revising up our CPI inflation forecasts for 2021 to above 6 percent, the highest in more than 30 years," the report says.
"After peaking at close to 6.3 percent in early 2022, annual CPI inflation is then expected to cool but remain above the 1-3 percent inflation target until late 2023."
The report says the high inflation is likely to prompt a "more aggressive" path of Official Cash rate tightening from the Reserve Bank.
"For now, we expect a measured pace of 25bp hikes and a 2 percent OCR peak in late 2022, but events can change quickly. The RBNZ looks to have an inflation problem that they need to deal with."
The report says the major inflationary pressure for Q4 will come from transport with a sharp rise in the price of petrol.
Housing, rent and building costs are predicted to see a sharp rise in Q4 as well as food prices.
The bank predicts food prices and rent will continue to rise in 2022.
The report also says there will be continued issues with the supply chain due to COVID-19 and this will put pressure on prices.
The next CPI figures are due to be released on January 27 by Stats NZ.