Latest / Best of Business / Liam Dann: NZ Herald Business editor on the inflation rate holding steady at 2.2%

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Liam Dann: NZ Herald Business editor on the inflation rate holding steady at 2.2% · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 2: So in Flash and the steady two point two percent
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  Speaker 2: economists had been expected, had been expecting it to go down.
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  Speaker 2: Liam danis with us to go through the numbers. He's
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  Speaker 2: new se Only Herald's Business editor at large, Limpy John.
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  Speaker 3: Are you surprised, No, Well, perhaps I am. Perhaps I'm
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  Speaker 3: pleasantly surprised that it's coming roughly where when expected, because
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  Speaker 3: these days you're happy if the economists forecasts come in
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  Speaker 3: about right. So yeah, I mean it's two point two.
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  Speaker 3: The Reserve Bank thought it might have been two point one,
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  Speaker 3: but I'd seen some other economists warning that it could
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  Speaker 3: be two point three. So I think the markets and
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  Speaker 3: the people that worry about things like where our interest
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  Speaker 3: rates are going are pretty happy with that. So you know,
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  Speaker 3: it means that, you know, the cost of living is
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  Speaker 3: still rising, but it's rising at the rate that you know,
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  Speaker 3: the Reserve Bank's supposed to keep it at, which is
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  Speaker 3: around that two percent mark. So yeah, hopefully that is
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  Speaker 3: good news for those looking to see some rate cats
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  Speaker 3: coming their way in the next month.
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  Speaker 2: Yeah, the rates are one thing. But you know, when
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  Speaker 2: you compare it to what it was two and a
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  Speaker 2: half years ago seven point three percent, you'd sort of think, well,
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  Speaker 2: life would You would think possibly life might be feeling
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  Speaker 2: a bit cheaper or less expensive, But it's not. Why
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  Speaker 2: is that?
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  Speaker 3: Well, it is cumulative. So that's the problem, really, isn't
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  Speaker 3: it is?
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  Speaker 1: Why?
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  Speaker 3: You know, you see people people feel the cost of
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  Speaker 3: living acutely and it piles on top of itself. So, okay,
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  Speaker 3: we've got it back to a sort of sustainable rate
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  Speaker 3: of growth at around two percent two point two, but
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  Speaker 3: that all of that's piled on top of everything you've
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  Speaker 3: been through for the past past three or four years,
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  Speaker 3: and so you know, not much is coming down. There
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  Speaker 3: was a little bit of relief there with vegetables, which
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  Speaker 3: are still cheaper than they were, but that was that
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  Speaker 3: was really off the back of the terrible weather we
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  Speaker 3: had in in twenty twenty three, I think, So, you know,
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  Speaker 3: a little bit of relief there, but generally some of
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  Speaker 3: the other stuff's taking a bit longer. Rents, for example,
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  Speaker 3: that was up four point two percent, and that's you know,
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  Speaker 3: accounted for almost a fifth of the annual increase, So
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  Speaker 3: that's taking a while to come out. I mean, that
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  Speaker 3: should start to come down because you know, obviously the
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  Speaker 3: property markets and the doldrums, But that sort of thing
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  Speaker 3: takes a while, and then you know, already you've got
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  Speaker 3: concerns about some of the imported stuff coming back up.
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  Speaker 3: So oil prices in the last month or so up
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  Speaker 3: a bit, the New Zealand dollar down. That doesn't help
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  Speaker 3: the cost of imports. I think what economists expect to
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  Speaker 3: see is that, you know, we can't control the cost
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  Speaker 3: of imported goods, but the cost of doing things in
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  Speaker 3: the New Zealand economy is continuing to come back down
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  Speaker 3: to neutral or fall in some places. So you know,
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  Speaker 3: that's partly because of the you know, recessionary nature of things.
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  Speaker 3: You know, if you wanted to get some work done
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  Speaker 3: in your house right now, it's probably a bit cheaper.
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  Speaker 3: And it was right at the height of the boom
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  Speaker 3: when we had labor shortages and high inflation and things.
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  Speaker 3: So it starts to come back to some sort of normal,
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  Speaker 3: but yeah, you're still you're still paying that that that
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  Speaker 3: cumulative increase still explensive.
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  Speaker 2: I know a few months ago there was a I
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  Speaker 2: don't know, I won't call it a warning but there
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  Speaker 2: was a suggestion that if Donald Trump became president again,
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  Speaker 2: that would be bad news for global and flashable he
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  Speaker 2: as president, now, what's your expectation of the impact of
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  Speaker 2: that on flash and globally?
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  Speaker 3: Yeah, well, it's being watched very very closely and like
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  Speaker 3: literally day by day, so that the very first day
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  Speaker 3: he didn't come out with tariff straight away, so that
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  Speaker 3: was seen as a good news on the inflation front,
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  Speaker 3: so that the stock markets went up and interest rates
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  Speaker 3: came down a bit, but it's still totally you know,
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  Speaker 3: we don't know what he's going to do, do we
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  Speaker 3: And you know, anyone who can guess that's doing pretty well,
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  Speaker 3: and so yeah, the idea would be that if he
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  Speaker 3: does put the big tariff's on and start a trade
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  Speaker 3: war with Canada and so on, then that would put
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  Speaker 3: inflation into the US economy and that would keep their
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  Speaker 3: interest rates up and that would keep their dollar up.
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  Speaker 3: And we've already seen a bit of that in expectation.
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  Speaker 3: That's why the New Zealand dollar has come off, because
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  Speaker 3: the interest rates have stayed up a bit in the
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  Speaker 3: States and their dollar is strong, and so yeah, as
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  Speaker 3: our dollar comes down, that does start to hurt you
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  Speaker 3: know what we're paying for imports, so it starts to
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  Speaker 3: cost us there. Although you know New Zealand is an
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  Speaker 3: export economy, so the low dollar is doing is helping
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  Speaker 3: rebalance things a bit with the dairy farmers getting good,
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  Speaker 3: you know, good good prices for their products at the moment,
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  Speaker 3: and that that actually is probably on balance a good
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  Speaker 3: thing for our economy right now, which is more foreign
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  Speaker 3: dollars coming in.
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  Speaker 2: Just before we move on, let me share a message
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  Speaker 2: that Ben Is sent in on ninety two ninety two.
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  Speaker 2: Two words he says, thanks national. How much credit can
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  Speaker 2: the government take for the weapons are at?
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  Speaker 1: Yeah?
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  Speaker 3: I guess that governments will always cop it if inflations
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  Speaker 3: up or down. I mean a lot of it is
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  Speaker 3: out of their control. I mean they have done, you know,
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  Speaker 3: probably the right things in terms of you know, getting
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  Speaker 3: government spending down to some extent. But you know, nobody's
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  Speaker 3: going to thank the Reserve Bank governor because they've have
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  Speaker 3: been through so much pain. But those high interest rates
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  Speaker 3: have really hammered the economy. And that's he's done the
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  Speaker 3: job of bringing inflation back into the band anyway, and
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  Speaker 3: people can debate how much damage has been done along
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  Speaker 3: the way.
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  Speaker 2: There'll be some debate before we go. Winston Peter's was
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  Speaker 2: quote this week saying that he puts his youthful looks
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  Speaker 2: down to eating fish three times a week. How soon
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  Speaker 2: is it going to be until salmon is more affordable?
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  Speaker 3: That's very good question. I can't I in my lifetime,
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  Speaker 3: I've never seen seafood and fish get cheaper exactly.
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  Speaker 2: All right, Doom and gloom, Hey think you down appreciate it?
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  Speaker 1: Cool?
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  Speaker 2: Cheers, that's Lim Dany's Herald's Business editor at Large thirteen
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  Speaker 2: past eleven.
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