Latest / Best of Business / Liam Dann: Business Editor on NZ officially out of recession, what's to come for the economy

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Liam Dann: Business Editor on NZ officially out of recession, what's to come for the economy · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk z'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Some time to say good afternoon or is it good
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  Speaker 2: evening now to Liam Dan New Zealand Herald Business Editor
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  Speaker 2: at Large.
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  Speaker 3: Liam Highday, Tim.
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  Speaker 2: So well New Zealand's climbed out of recession. Woo whoo.
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  Speaker 4: Yeah, it's really hard to know.
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  Speaker 3: Look that it was a better than expected result. It's
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  Speaker 3: definitely a good thing. Let's say we're who before we
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  Speaker 3: get into the final details of going through the economist
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  Speaker 3: reports that they're very quick to move into cautious mode
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  Speaker 3: and start telling us, you know why, we can't be
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  Speaker 3: celebrating yet. But look, it's better than the alternative, which
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  Speaker 3: was that it came in worse than expected. I think
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  Speaker 3: people were probably feeling a bit more gloomy, certainly in
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  Speaker 3: the cities.
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  Speaker 4: I think.
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  Speaker 2: So the economy grew zero point seven in the December quarter,
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  Speaker 2: better than the economists had predicted. Nikola Willis was upbeat
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  Speaker 2: on the show an hour ago.
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  Speaker 5: Let's we're turning the corner, which is what New Zealanders
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  Speaker 5: need after a very tough time with high inflation, high
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  Speaker 5: interest rates and growth bouncing along the bottom. The numbers
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  Speaker 5: today are better than was forecast and tell us that
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  Speaker 5: recovery is underway.
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  Speaker 2: So actually, she didn't sound as up beat as I
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  Speaker 2: thought she would be, maybe because we're still digging ourselves out.
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  Speaker 4: She knows, she's got to be a bit cautious.
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  Speaker 3: Right, Yeah, Look, Look, this quarter we're currently in has
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  Speaker 3: felt like it hasn't been a boomer. We've seen some
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  Speaker 3: fairly grim consumer confidence numbers in the last week or so,
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  Speaker 3: and there's just a feeling that maybe you know, the
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  Speaker 3: uncertainty around well, the global economy, but also things like
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  Speaker 3: you know, New Zealand's housing market just hasn't surged back
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  Speaker 3: quite as quickly as people might have hoped from the
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  Speaker 3: lower interest rates. And you know, the things that underpinned
• 2:01
  Speaker 3: this GDP result were stronger tourism, which which sort of
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  Speaker 3: lifted retail spending and spending by tourists did some of
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  Speaker 3: the categories. And of course the really good you know,
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  Speaker 3: dairy and meat export conditions we've had and prices we've
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  Speaker 3: had has lifted the primary sector.
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  Speaker 4: But then you know, in the.
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  Speaker 3: Cities, which is where I'm doing most of my living,
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  Speaker 3: you know, people are still struggling, you know, with the
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  Speaker 3: cost of living, and with with sort of insecurity about
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  Speaker 3: jobs and rising unemployment and those sort of things. So
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  Speaker 3: I think, you know, it's not necessarily a straight line recovery, and.
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  Speaker 4: We have to be prepared for them, you know, maybe
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  Speaker 4: to stare a little bit.
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  Speaker 3: I'd like to think we don't go back, you know,
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  Speaker 3: we will keep growing.
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  Speaker 2: I think, well, you know, it's hard for the average
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  Speaker 2: sort of person to work out what the reactions should be.
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  Speaker 2: So what's the reaction of the country's economists.
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  Speaker 4: Well, yes, definitely cautious.
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  Speaker 3: You know, there's saying I think they're agreeing that is,
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  Speaker 3: you know, it is a corner turned or the first
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  Speaker 3: step on a road to recovery. I think that the
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  Speaker 3: Kiwi bank guys said, and even even Stephen Topless at
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  Speaker 3: ben Zi, who's pretty pretty cautious, he was saying it's
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  Speaker 3: the start of recovery. But you know, he points out
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  Speaker 3: that on the current numbers, you know, on the GDP
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  Speaker 3: per capita, you've got to get to twenty twenty eight
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  Speaker 3: before we're back to the to the kind of peaks
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  Speaker 3: we had before the downturn started. So that's a long
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  Speaker 3: slow recovery. On a per capita basis, which it was
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  Speaker 3: nice to see per capita GDP turn, but that's partly
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  Speaker 3: a fact a function of few you know, slar population growth,
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  Speaker 3: so that sort of sorts itself.
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  Speaker 2: Yeah, I think I enjoyed the I think it was
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  Speaker 2: Qbank's economists you said, we're crawling out of recession, which
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  Speaker 2: was slowly we're putting it. What are the chances of
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  Speaker 2: the number being revised down later on, because you know
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  Speaker 2: we've seen it happen before him.
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  Speaker 4: We yeah, look, it's entirely possible.
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  Speaker 3: I mean could could be revised up to I mean
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  Speaker 3: that the difficulty is it seems to be that capturing
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  Speaker 3: everything that moves in the economy a very difficult task
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  Speaker 3: and you've got to get it for the record absolutely right.
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  Speaker 3: So if it turns out that they've they need longer
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  Speaker 3: and you know, it becomes fair that it could be revised.
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  Speaker 4: But I wouldn't panic about that. It's it's it's it's
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  Speaker 4: like we had some bad.
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  Speaker 3: Revisions that that you know that that really slammed home
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  Speaker 3: the pain of the recession in the middle of last year.
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  Speaker 3: But the latest numbers there wasn't too much revision there
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  Speaker 3: to the to the earlier numbers. I think, I think,
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  Speaker 3: you know, we are seeing you know, New Zealand does
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  Speaker 3: tend to hum when the dairy industry hums, and that's
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  Speaker 3: obviously good tourism coming back to sort of pre COVID levels.
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  Speaker 3: At least you can say this is the basics of
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  Speaker 3: the economy coming right. So if the if these things
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  Speaker 3: continue to stay buoyant, and then interest rates continue to fall,
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  Speaker 3: then you start to get the frothier stuff, the consumer
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  Speaker 3: spending and and and and things, you know, central city
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  Speaker 3: workers and things starting to feel more confident and hopefully
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  Speaker 3: that follows and this this might be the kind of
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  Speaker 3: psychological boost that helps us.
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  Speaker 4: On our way.
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  Speaker 2: Excellent. Hey, thanks so much, Liam. That's Liam down, New
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  Speaker 2: Zealand Hero Business editor at
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