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Cameron Bagrie: Independent Economist on consumer arrears falling to the lowest level since 2021 · Early Edition with Ryan Bridge

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  Speaker 1: Country as a whole dealing with a bit less debt. Centrics.
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  Speaker 1: Consumer credit shows areas are at their lowest level since
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  Speaker 1: twenty twenty one. Personal loan hardship up thirty seven percent
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  Speaker 1: since last year. Cameron Baggery, independent economist with US this morning. Cameron,
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  Speaker 1: good morning. What is there a bit of a two
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  Speaker 1: stage thing happening here?
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  Speaker 2: Well, what we know is that there's still a bit
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  Speaker 2: of stress out across the climbing But we've got a
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  Speaker 2: bit of a two speed economy. You've got rural versus
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  Speaker 2: urban walk and Wellington versus sort of the rest of
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  Speaker 2: the country. The centric numbers tie and with bank non
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  Speaker 2: performing loans, and guess what. Banks are still doing pretty
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  Speaker 2: well and non performing loans are pretty low. There's zero
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  Speaker 2: point seven percent of total of loans are what's called
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  Speaker 2: non performing. That's a pretty low number. Housing, business, agribusiness,
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  Speaker 2: consumer debt not out of control. Yes, these credit metrics
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  Speaker 2: are just some pretty simple indicators. It's yes, there's not
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  Speaker 2: a lot of stress out there. We know it might
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  Speaker 2: be an awful lot of personal stress because of the
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  Speaker 2: household living crists, but the actual numbers are telling us
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  Speaker 2: the economy is not too bad.
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  Speaker 1: Show which is a good thing to hear. What about
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  Speaker 1: consumer credit demand that's still pretty subdued. I mean, we
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  Speaker 1: saw the numbers last week consumers sentiment coming up. This
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  Speaker 1: is saying that the demand for credits still subdued.
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  Speaker 2: You've got this two stage economy once again. If we
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  Speaker 2: look at the business side of the equation, your businesses
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  Speaker 2: are becoming increasingly optimistic, which is a good sign. If
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  Speaker 2: you look at the consumers, i the buyers of the
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  Speaker 2: goods that businesses produced, that they're still cautious. You know
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  Speaker 2: why are they cautious, Well, they're not getting wage games.
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  Speaker 2: If you look at what's called real wages, which is
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  Speaker 2: wages divided by inflation. While that's a negative number, look
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  Speaker 2: at house prices, but outside of the Deep South house
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  Speaker 2: prices again in South, people still a little bit cautious
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  Speaker 2: about their job and there's not a lot of good
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  Speaker 2: things going on in the consumer space, partifically when you
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  Speaker 2: overlay that with high petrol prices. So it's just another
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  Speaker 2: example of what's called that ca shaped economy. We got
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  Speaker 2: one side it's looking a little bit more positive than others.
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  Speaker 1: We've been in the zone for a long time. Now,
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  Speaker 1: when do we come out of that.
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  Speaker 2: Well, we're slowly coming out of it. But this is
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  Speaker 2: a great transition, you know, right, we're actually fundamentally replumbing,
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  Speaker 2: rewiring the whole new ualn e climent. For about twenty years,
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  Speaker 2: we had this economy where we sold more expensive houses
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  Speaker 2: to each other, We brought in a whole lot of migrants,
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  Speaker 2: we relied on tourism, we relied on cheap, abundant energy. Well,
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  Speaker 2: that year is over and now we've got to get
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  Speaker 2: back to a model that's built for our business. Is
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  Speaker 2: the vesting for the future, your productivity growth, you have,
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  Speaker 2: the use of natural resources. Electrification is going to be
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  Speaker 2: a word that's used an awful lot over the past
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  Speaker 2: and the next to a few years. We need better
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  Speaker 2: economic policy to complement that in regard to what we're
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  Speaker 2: going on within the within the business sector. But it's
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  Speaker 2: a fundamentally different economic model, and that sort of stuff
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  Speaker 2: takes time and it brings a little bit of grumpiness
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  Speaker 2: along all the way. But we're getting there. We're seeing
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  Speaker 2: an export leed of coaserec recovery, which I'll take any
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  Speaker 2: day of the week over what's called to borrow and spende.
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  Speaker 2: Awkward property must get lead recovery. But it just takes
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  Speaker 2: a little bit of time and these sort of transitions
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  Speaker 2: are awkward for the society.
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  Speaker 1: Cameron Begory Good Stuff, Independent Economists.
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  Speaker 2: For more from Early Edition with Ryan Bridge.
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