Latest / Best of Business / Brad Olsen: Infometics Principal Economist outlines economic predictions for 2025

Transcript

Brad Olsen: Infometics Principal Economist outlines economic predictions for 2025 · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk zed B.
• 0:12
  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Brad Olsen, the Prime Minister, was grilled about his poor
• 0:20
  Speaker 2: poll numbers on his morning media around this morning, and
• 0:23
  Speaker 2: he kept quoting one economist when promising that things will
• 0:27
  Speaker 2: get better.
• 0:28
  Speaker 3: You know it is this, you know, some green sheets.
• 0:30
  Speaker 4: I mean I saw, you know, Brad Olsen saying by
• 0:32
  Speaker 4: the end of the you know, by the end of
• 0:33
  Speaker 4: the year that we forty five million dollars extra week
• 0:35
  Speaker 4: in Kiwis pockets to spend in the economy. That's all
• 0:38
  Speaker 4: good stuff as interest rates come down.
• 0:39
  Speaker 2: Brad Olsen is of course Informetrics principal economisties with us
• 0:42
  Speaker 2: this evening high Brad, good evening. So in reference to
• 0:47
  Speaker 2: the Prime Minister's comments, when will we be feeling better,
• 0:50
  Speaker 2: how will we be feeling about the economy by the
• 0:51
  Speaker 2: end of the year.
• 0:53
  Speaker 3: Yeah, I mean we do expect things to continually get better.
• 0:56
  Speaker 4: Of course, those interest rates are coming down, but it
• 1:00
  Speaker 4: takes a bit of time for everyone to refix onto them.
• 1:03
  Speaker 4: And at the same time, you know, data out recently
• 1:05
  Speaker 4: showed that the unemployment rate has been going up so
• 1:08
  Speaker 4: I think we're in that odd period and very challenging
• 1:11
  Speaker 4: period still where there's a lot of hurt and a
• 1:13
  Speaker 4: lot of economic challenge around, but there are those grander
• 1:16
  Speaker 4: shoots showing through. The Prime Minister referenced one of the
• 1:19
  Speaker 4: numbers that we've recently quoted when we looked at our
• 1:21
  Speaker 4: latest economic forecast, which is that by the end of
• 1:24
  Speaker 4: this year, we expect around forty five million dollars a
• 1:27
  Speaker 4: week more to be available for households to spend out
• 1:30
  Speaker 4: in the economy that previously they had to put on
• 1:32
  Speaker 4: those much higher mortgage rates. So that's certainly helping, and
• 1:37
  Speaker 4: you're starting to see that in some areas across business,
• 1:40
  Speaker 4: you're starting to see the likes of job ads that
• 1:42
  Speaker 4: have plateaued out and similar but in reference, I mean
• 1:46
  Speaker 4: you mentioned Ryan that some of those pole results, it
• 1:48
  Speaker 4: was interesting some of them last night showing the likes
• 1:51
  Speaker 4: of household's economic outlook as well.
• 1:54
  Speaker 3: Households are saying that you know, there's still nearly.
• 1:57
  Speaker 4: A quarter that are saying they expect things to be
• 2:00
  Speaker 4: worse in a year's time, and given the interest rates
• 2:02
  Speaker 4: are coming down, that's of course quite concerning. So it
• 2:05
  Speaker 4: shows that the economic recovery is not going to be
• 2:07
  Speaker 4: balanced everyone. There are some definite differences across but we
• 2:13
  Speaker 4: are a lot more confident, and that comes after some
• 2:15
  Speaker 4: pretty difficult economic times.
• 2:16
  Speaker 2: Yeah, the RBNZA where everyone sort of expecting a half
• 2:20
  Speaker 2: a percent when they go to meet next week. But
• 2:23
  Speaker 2: after that, do you expect that they will signal or
• 2:26
  Speaker 2: maybe even during the meeting will signal that they will
• 2:28
  Speaker 2: go further before November, perhaps even further than what we predict.
• 2:34
  Speaker 4: Well, in a sense, we're actually wondering at infometrics the opposite.
• 2:37
  Speaker 4: And this has been a slightly more controversial view than
• 2:39
  Speaker 4: we thought it would be when we started talking about it.
• 2:42
  Speaker 4: But we wonder looking at some of the pressures out
• 2:44
  Speaker 4: there in the economy. You look at the likes of
• 2:47
  Speaker 4: important inflation fares, the fact that the New Zealand dollar
• 2:50
  Speaker 4: is down quite a bit against the US over the
• 2:53
  Speaker 4: last couple of months, the fact that in the latest
• 2:56
  Speaker 4: A and Z Business Outlook.
• 2:57
  Speaker 3: Survey there were a higher proportion.
• 3:00
  Speaker 4: Of businesses saying they expect to get higher cost increases
• 3:04
  Speaker 4: in the next couple of months. None of that's sort
• 3:06
  Speaker 4: of good for longer term inflationary So we actually wonder
• 3:09
  Speaker 4: if Yep, the Reserve Bank goes by fifty in February,
• 3:13
  Speaker 4: but they might well signal that there's not quite as
• 3:15
  Speaker 4: many cuts left in the tank after that.
• 3:17
  Speaker 3: End.
• 3:18
  Speaker 4: Of course, we've seen retail banks the last couple of
• 3:20
  Speaker 4: weeks cutting their interest rates back quite a bit, and
• 3:23
  Speaker 4: so it wouldn't surprise us if you saw the Reserve
• 3:25
  Speaker 4: Bank cut the official cash rate, but maybe not quite
• 3:28
  Speaker 4: as many cuts to retail rates because the banks have
• 3:30
  Speaker 4: already priced some of them in. Now that's not to
• 3:33
  Speaker 4: say that the economy won't continue to get better, but
• 3:36
  Speaker 4: there is just that open question of sort of, you know,
• 3:38
  Speaker 4: are we where are we trying to get to?
• 3:40
  Speaker 3: Are we trying to get.
• 3:41
  Speaker 4: Back to sort of a more normal level of growth,
• 3:43
  Speaker 4: sort of not stellar, or are we able to supercharge
• 3:46
  Speaker 4: it ahead. At the moment, we're still worried that, you know,
• 3:48
  Speaker 4: we get growth back to just sort of plodding along.
• 3:51
  Speaker 3: And I think everyone's quite clear they'd like to see
• 3:53
  Speaker 3: more than that.
• 3:54
  Speaker 2: What's your take on what is good news from Westpac
• 3:57
  Speaker 2: today predicting that those dairy prices will stay above ten
• 4:00
  Speaker 2: dollars this year? What's your take on that?
• 4:02
  Speaker 4: Oh, look very encouraging and I think, you know, we've
• 4:04
  Speaker 4: been expecting for a couple of months now that a
• 4:07
  Speaker 4: lot of the conomic recovery that we're starting to come through. Yep,
• 4:10
  Speaker 4: it'll be driven by households. But at the same time,
• 4:13
  Speaker 4: those rural and provincial parts of New Zealand really are
• 4:16
  Speaker 4: starting to get a little bit more momentum showing through.
• 4:19
  Speaker 4: I've spent the last couple of days traveling around parts
• 4:21
  Speaker 4: of South Island, through the West Coast and Canterbury, and
• 4:24
  Speaker 4: there's certainly been a little bit more activity than I
• 4:26
  Speaker 4: feel like I saw towards the end of last year,
• 4:29
  Speaker 4: certainly the middle of twenty twenty four, and that just
• 4:32
  Speaker 4: suggests it's a little bit more confident starting to come through.
• 4:35
  Speaker 4: The difficulty is, you know, we're not seeing the economy
• 4:37
  Speaker 4: absolutely rip roaring, like no one's saying that, but equally
• 4:41
  Speaker 4: we're not in the same doldrums. I think that we
• 4:43
  Speaker 4: were going back a year ago and trying to find
• 4:45
  Speaker 4: that new economic goldilock zone is going to be important,
• 4:48
  Speaker 4: and I think we're starting to get a little bit
• 4:50
  Speaker 4: more clarity on where that might be. It's better, but
• 4:53
  Speaker 4: it's not fantastic and just hell raising all of a
• 4:55
  Speaker 4: sudden all that quickly.
• 4:57
  Speaker 2: Brad, thank you very much for that. Brad Olson informential
• 5:00
  Speaker 2: Principal Economist off quoted by the Prime Minister.
• 5:03
  Speaker 1: For more from News Talks B listen live on air
• 5:06
  Speaker 1: or online, and keep our show with you wherever you
• 5:09
  Speaker 1: go without podcasts on iHeartRadio