KEY POINTS:
Exporter gain is consumer pain as the falling kiwi looks set to curb the strong buying power enjoyed by New Zealanders over recent years.
Overseas travel and some goods such as whiteware are set to become dearer over the next six months, while the fall in crude oil prices will likely be offset by the lower exchange rate.
But UBS senior economist Robin Clements said there was unlikely to be a huge price shock.
"Basically at the end of the day, a falling exchange rate will manifest itself in higher cost of imports - exactly the extent to which that gets passed through depends on the state of demand, the state of margins etc and in a soft economy, some proportion of that drop may well get absorbed."
The price of petrol at the pump dropped again on Thursday, marking the first time since late May that a litre of 91 has been under $2.
Clements expects that to continue to fall if global oil prices continue to soften as widely anticipated, although that fall will be cushioned by the declining kiwi.
Andrew Dutkiewicz, chief executive of Noel Leeming Group, said the falling dollar could see a "substantial" increase in the price of whiteware such as fridges and freezers.
He said manufacturers have yet to pass on the escalating price of steel - something that is likely to happen soon.
"And with more and more [whiteware] being manufactured offshore, the impacts of the exchange rate does start to be noticeable. Our sense is that not too long from now we will see increases in whiteware prices."
But consumer electronics such as televisions and computers could still yet get cheaper - although Dutkiewicz said substantial annual price drops were now looking unlikely.
"Historically TVs and computers have dropped up to 25 per cent in price each year. From our perspective, they certainly won't go up. It might be that the rate of decline slows slightly."
House of Travel sales director Brent Thomas said airfares were likely to go up. It was, however, just one component in total travel expenditure.
"It's not going to make it unaffordable."
Even if fuel goes up, there is not a direct correlation with airfare pricing due to competition, he said.
Thomas said the short haul sectors of Australia and the South Pacific were likely to strengthen, while growth in the Europe, UK and US markets flatten. He is confident volumes will continue to be strong, but spending patterns may reflect the New Zealand traveller's reduced buying power.
"Instead of going for a 21-day holiday to Europe, they may go for 19 days... or they may move from a 4 1/2 star to a four star property."
But there was an upside.
"If the dollar falls away and there's a lot more people coming in, you've got a plane that needs to be filled on the way back out."
