There are predictions the latest Consumer Price Index (CPI) figures will reveal inflation has skyrocketed above 7 percent when the data is released on Thursday.
And independent economist Cameron Bagrie told AM on Tuesday many New Zealand households will continue feeling the pinch.
"It doesn't matter whether it's 6, 7 or 8 [percent] - whichever way you slice and dice it, it's hellish of a high number," he said.
"If you look at your benchmark compared to where wages are moving… the Labour Cost Index is going to be around 3 percent; so 3 percent take away 7, your cost of living is -4. So if you look at the typical household or wage earner out there at the moment, you're going back to the churn of about 4 percent - which is a pretty big hit to take over 12 months.
"Inflation is a thief that literally siphons money out of your pocket."
Bagrie said New Zealand was in danger of getting into a "rat race".
"Inflation goes up and because inflation goes up, we force up wages to compensate… that adds to costs - then we start seeing price inflation and, low and behold, the spiral is in motion or the mouse is going around and around on the exercise wheel."
The previous CPI figures released in January showed annual price inflation between the December 2020 and December 2021 quarter had hit 5.9 percent - the biggest annual jump in three decades.
Bagrie said about half of the inflation was down to the global economic situation and beyond New Zealand's control.
"We're just going to have to be patient in regard to reconnecting global logistics, COVID going away, etc etc."
The remaining 50 percent of inflation was created by the mismatch between demand and supply, he said.
"We've literally got an economy at the moment that is too hot to trot. There's too much demand relative to our ability to meet that demand so there are two potential solutions… we raise the economy's ability to meet demand and that means more workers, opening the borders up, a more productive, dynamic economy to lift the supply-side capacity.
"If we can't do that, then the other side is to curb demand and that's why the Reserve Bank is out there waving that interest rate stick - in the form of trying to slow the likes of the property market."
The Reserve Bank hiked the Official Cash Rate to 1.5 percent on Wednesday, with the central authority saying it needed to "reduce the risks of rising inflation expectations" and provide "more policy flexibility ahead in light of the highly uncertain global economic environment".
As the cost of living crisis mounts, New Zealanders have on average spent an extra $4000-$5000 in the past 12 months on basics including food, rent and fuel.