New Zealand's central bank has raised its benchmark interest rate by a half point to 4.75 per cent, another blow for consumers as the country's economy reels in the wake of a devastating cyclone.
Former Cyclone Gabrielle struck New Zealand's North Island last week, killing 11 people and causing billions of dollars in damage to homes and infrastructure.
Food drops to isolated communities are still being delivered by air, and authorities are working urgently to repair hundreds of kilometres of damaged roads.
While most of the immediate search and rescue work has been completed, about 1,000 people are still sleeping in evacuation centres and some communities have set up their own road blocks at night to stop looting.
About 250 state highways and local roads remained closed as of Monday afternoon and crews were repairing 400 kilometres of highway, according to the government.
Queensland Fire and Emergency Services, which have been providing assistance to civil and defence teams, have been using drones to assist in the search for buried vehicles and structures in the devastated Hawke's Bay area.
Rates increase will add further pain
Wednesday's rates increase, which could raise borrowing costs on everything from credit cards to mortgages, was an attempt to wrestle down inflation from its current level of 7.2 per cent, well above the bank's target of about 2 per cent.
Reserve Bank of New Zealand governor Adrian Orr said while there were some early signs price pressures were easing, core inflation remained too high, and over time the cyclone rebuild would only add to inflationary pressures.
"Cyclone Gabrielle and other recent severe weather events have had a devastating effect on the lives of many New Zealanders," he said.
"It is too early to accurately assess the monetary policy implications of these weather events, given that the scale of destruction and economic disruption are only now becoming evident."
PM calls for more resilient infrastructure
New Zealand Prime Minister Chris Hipkins has described the cyclone, which caused widespread damage on the North Island and claimed 11 lives, as the country's most damaging natural disaster in at least a generation.
The cyclone followed another storm two weeks earlier which swamped Auckland and killed four people.
Mr Hipkins said there had been a nine-fold increase in government spending in the 2021-22 fiscal year on helping farmers cope with floods, storms and drought.
The number of weather events that require emergency road work more than doubled from an average of 67 a year between 2018 and 2021 to 140 a year, he said.
"We know that how we recover has to be done a little bit differently this time," Mr Hipkins told Parliament.
"We've got to build back better, we've got to build back safer and we've got to build back smarter."
New Zealand, he said, was "without question" experiencing the effects of climate change and extreme weather events were becoming more common and more intense.
"Business as usual won't work any more," he said.
"We have to accept that billions of dollars of additional investment is going to be required not just to fix up what has been damaged but to build more resilience so that we can better cope with these types of events in the future."
AP/ABC
