Latest / Early Edition with Ryan Bridge / Kelly Eckhold: Westpac Chief Economist ahead of the Q3 GDP announcement

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Kelly Eckhold: Westpac Chief Economist ahead of the Q3 GDP announcement · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So it's didpday the final red for the year. We
• 0:03
  Speaker 1: had a zero point nine percent drop in June. Banks
• 0:06
  Speaker 1: are expecting to bounce back now, some are saying one percent.
• 0:09
  Speaker 1: West Tax Chief economists Kelly Echold who joins me, Now, Hello, Kelly,
• 0:14
  Speaker 1: good morning, and what do you think.
• 0:17
  Speaker 2: Well, then we're going to get a pretty good quarter
• 0:19
  Speaker 2: this time around. We've got zero point nine percent gain
• 0:23
  Speaker 2: in the forecast, so basically felling in that hole that
• 0:27
  Speaker 2: we saw in Q two.
• 0:29
  Speaker 1: So where are getting the hint that it's going to
• 0:31
  Speaker 1: be good? Is that retail figures are.
• 0:32
  Speaker 2: One Well, it's actually quite across the board this time,
• 0:36
  Speaker 2: which is quite encouraging because I mean in previous quarters
• 0:41
  Speaker 2: where we have seen strength, it's been quite narrowly based,
• 0:44
  Speaker 2: particularly around the agricultural sector. So what we can kind
• 0:47
  Speaker 2: of see here and the indicators is that a lot
• 0:49
  Speaker 2: of the indicators of the services sector center have done
• 0:52
  Speaker 2: quite well. So we have had decent retail trade, We've
• 0:55
  Speaker 2: had some decent construction figures, but it does look like
• 0:59
  Speaker 2: all through the professional services type sectors there's been decent
• 1:03
  Speaker 2: activity there as well. So we're looking for a broad
• 1:06
  Speaker 2: based result.
• 1:08
  Speaker 1: Is it fair to say that we just got our
• 1:09
  Speaker 1: mojo back, that we've got some confidence, and now people
• 1:12
  Speaker 1: are prepared to commit some capital after sitting on their hands.
• 1:17
  Speaker 2: I certainly think this is one of the better results
• 1:19
  Speaker 2: I've seen in a couple will be one of the
• 1:21
  Speaker 2: better results we've seen in a couple of years, as
• 1:23
  Speaker 2: even the forecast. You're right because of that broader based nature.
• 1:26
  Speaker 2: I think it's probably a little bit too early to assess,
• 1:29
  Speaker 2: because there remains quite a lot of volatility in this data.
• 1:34
  Speaker 2: You know, for example, what this result would do is
• 1:37
  Speaker 2: fill in a big hole from the previous quarter. There's
• 1:40
  Speaker 2: still quite a pronounced seasonal pattern. We need to see
• 1:44
  Speaker 2: two or three quarters of this before you can really
• 1:46
  Speaker 2: confidently say that you're on an underlying upward trend. I reckon.
• 1:50
  Speaker 1: Meanwhile, I've got we've got the RB who's getting a
• 1:52
  Speaker 1: bit upset that retail banks are putting their interest rates up,
• 1:56
  Speaker 1: which is not what they wanted. So and they're going
• 1:58
  Speaker 1: to get this figure. What do you think this is
• 2:00
  Speaker 1: going to mean for the RB heading into the new
• 2:02
  Speaker 1: year and our interest rates?
• 2:05
  Speaker 2: Well, I mean, I don't think it means anything for
• 2:07
  Speaker 2: our interest rates in the short term. And you would
• 2:09
  Speaker 2: have seen the renew resipient governor on the on the
• 2:12
  Speaker 2: tapes recently really making that point quite forcefully now that
• 2:16
  Speaker 2: they're not really looking at the term rate rise, but
• 2:19
  Speaker 2: this data is going to fill in some of the
• 2:22
  Speaker 2: hole that they saw in capacity in the economy in
• 2:26
  Speaker 2: the last year or so. I mean they only expected
• 2:29
  Speaker 2: and increased zero point four percent in this quarter, so
• 2:32
  Speaker 2: there's going to be quite a lot better than that,
• 2:36
  Speaker 2: So they should be probably a lot more comfortable that
• 2:39
  Speaker 2: the economy is in a better place.
• 2:41
  Speaker 1: Kelly, I thank you, and I hope you'll write for
• 2:44
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• 2:50
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