Latest / Best of Business / Perspective with Heather du Plessis-Allan: There's a gloomy note in the Reserve Bank decision

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Perspective with Heather du Plessis-Allan: There's a gloomy note in the Reserve Bank decision · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News talks'd be follow
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• 0:17
  Speaker 1: Here the dupless Ellen. Look.
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  Speaker 2: I don't really want to have to start on a
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  Speaker 2: bum note, but if there is a thing that we
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  Speaker 2: do on the show, it's honesty. So let's be honest
• 0:24
  Speaker 2: about it. What the Reserve Bank decision told you today
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  Speaker 2: is how much trouble our economy is. And if you're
• 0:30
  Speaker 2: in business, you already know this. You don't need me
• 0:32
  Speaker 2: to tell you this. I was talking to a couple
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  Speaker 2: of CEOs yesterday. They were telling me, cannot see the
• 0:36
  Speaker 2: green shoots. Cannot see the green shoots. We've been waiting.
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  Speaker 2: We were told survived to twenty five, were halfway through.
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  Speaker 2: We're still stuffed. We'll let me tell you what we
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  Speaker 2: got today. We got a twenty five basis point cut.
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  Speaker 2: We needed fifty because that ocr is still too high.
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  Speaker 2: It's now sitting at three point twenty five percent. It's
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  Speaker 2: probably actively still dampening our economic growth because I think
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  Speaker 2: the consensus is that three is neutral and we're not
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  Speaker 2: there yet. But they could not give us a bigger
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  Speaker 2: cut today, And even they must realize how much damage
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  Speaker 2: they are doing because they themselves have it that the
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  Speaker 2: economy is even more stuffed than they thought it was
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  Speaker 2: as recently as February. When they last met. Back in February,
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  Speaker 2: they predicted that in the first quarter of this year
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  Speaker 2: we would have seen growth of zero point six percent.
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  Speaker 2: They have revised that down to zero point four. This
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  Speaker 2: quarter that we're in right now, they forecast that we
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  Speaker 2: would be growing at zero point six percent. They just
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  Speaker 2: hal that to zero point three. Next quarter they thought
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  Speaker 2: would be zero point five. They've taken that down to
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  Speaker 2: zero point two.
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  Speaker 1: That's not good.
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  Speaker 2: That's bad. And why couldn't they give us a bigger
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  Speaker 2: cut to help us along, because they might set off
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  Speaker 2: inflation again if they do. We just saw a rise
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  Speaker 2: in inflation the other day, and there is potential for
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  Speaker 2: it to keep on creeping up. We've got fairy prices
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  Speaker 2: going up, we've got electricity prices going up, we've got
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  Speaker 2: rates going up, on and on and on and on.
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  Speaker 2: The budget that we just had last week is not
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  Speaker 2: super deflationary, is it. And their job at the Reserve Bank, remember,
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  Speaker 2: is not to help the economy grow. That is not
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  Speaker 2: their job. Their job is to contain inflation and it's
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  Speaker 2: kind of borderline and they can't take any chances there.
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  Speaker 2: Could we have a touch of the old stagflation back,
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  Speaker 2: no growth, prices going up feels a bit like that's
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  Speaker 2: a risk at the moment, isn't it now? I hope not,
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  Speaker 2: But hope is not a strategy. And yet what else
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  Speaker 2: have we got left when even the Reserve Bank can't
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  Speaker 2: get out of the economy's way.
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