Latest / Best of Business / Jarrod Kerr: Kiwibank economist on New Zealand's GDP dropping 0.2 percent

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Jarrod Kerr: Kiwibank economist on New Zealand's GDP dropping 0.2 percent · Best of Business

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  Speaker 2: Good Afternoon.
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  Speaker 3: To the surprise of absolutely no one, the economy has
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  Speaker 3: shrunk again. GDP was down zero point two percent in
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  Speaker 3: the second quarter of the year. Retail trade, accommodation, agriculture, forestry, fishery, fishing,
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  Speaker 3: and wholesale trade industries all foul. Jared ker is Kiwibank's
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  Speaker 3: chief economist and with us. Now, Hey Jared, Hi, mate,
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  Speaker 3: it's good to talk to you again. You reckon this
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  Speaker 3: basically is getting us very close to, if not already
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  Speaker 3: at two years of recession.
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  Speaker 4: Yeah, yeah, it is. We think we'll see another contraction
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  Speaker 4: in the current quarter, so that'll bring it on two years.
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  Speaker 2: I mean, the thing that's the number that hurts the
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  Speaker 2: most is the per capita GDP fall of two point
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  Speaker 2: seven percent. How significant is that?
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  Speaker 4: It is very significant. We have seen quite a spike
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  Speaker 4: in migration over the twenty twenty three but when we
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  Speaker 4: chop it up and look on a per capita basis,
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  Speaker 4: we saw a four point five five in the quarter,
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  Speaker 4: and we're down four point six from twenty twenty two levels.
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  Speaker 4: That's significant, and that's worse than what we saw during
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  Speaker 4: the GFC.
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  Speaker 2: When does this turn around? When do we start seeing
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  Speaker 2: per capita growth again?
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  Speaker 4: God? Late next year, I think. But I think the
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  Speaker 4: Reserve banks put a stake in the ground by sort
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  Speaker 4: of cutting in August, and I think that'll mark the
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  Speaker 4: turning point. Discussions with businesses in households since then has seen,
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  Speaker 4: you know, people lift their heads and look to next
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  Speaker 4: year with a bit more optimism.
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  Speaker 2: What do you reckon the Reserve Bank does next month?
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  Speaker 4: I think they cut twenty five. I think they should
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  Speaker 4: cut fifty. We saw the Fed come out this morning
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  Speaker 4: with a fifty basis point rate cut. They're clearly willing
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  Speaker 4: to cut a little faster than we are, and I
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  Speaker 4: think we need to do the same. You know, we
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  Speaker 4: can't forget that interst rate cuts today take up to
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  Speaker 4: eighteen months to feed through, so you're sitting policy for
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  Speaker 4: the start of twenty twenty six. I think they need
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  Speaker 4: to get cracking.
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  Speaker 2: Good stuff. Jered really appreciated Jared kirk Kiwibanks, Chief economist.
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