Latest / Early Edition with Ryan Bridge / Brad Olsen: Infometrics Principal Economist previews today's Pre-Election Economic and Fiscal Update

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Brad Olsen: Infometrics Principal Economist previews today's Pre-Election Economic and Fiscal Update · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So it is pre-food day today. Budget 26 forecasts were
• 0:04
  Speaker 1: GDP 1.2% for 2026, 2.3% for 2027. Unemployment they thought
• 0:10
  Speaker 1: then would be 5.5%. Inflation they thought would peak at 4%. Well,
• 0:15
  Speaker 1: we know that's slightly outdated already. And the surplus, 28.29.
• 0:18
  Speaker 1: So the update happens today. Brad Olson, Principal Economist, Infometrics. Brad,
• 0:22
  Speaker 1: good morning. Hello, Brad.
• 0:27
  Speaker 2: Good morning.
• 0:28
  Speaker 1: So are you expecting we will see much change from
• 0:30
  Speaker 1: the budget numbers?
• 0:32
  Speaker 2: We do expect a slightly rosier look coming through in
• 0:36
  Speaker 2: the books, but part of that's also around timing. Treasury
• 0:39
  Speaker 2: will have signed off their forecast, I believe, towards the
• 0:42
  Speaker 2: end of August. And of course, that was before you
• 0:45
  Speaker 2: saw fuel prices that have gone up considerably the last
• 0:48
  Speaker 2: couple of weeks through September. And also the fact that
• 0:51
  Speaker 2: bond rates, so government interest rates effectively, having lifted quite
• 0:57
  Speaker 2: materially too. So in a sense, we are looking likely
• 1:00
  Speaker 2: to have better numbers emerging. I think you've seen the
• 1:03
  Speaker 2: finance minister highlight that a little bit over the weekend
• 1:07
  Speaker 2: and saying that there would be a bit more of
• 1:08
  Speaker 2: an upside positive surprise showing through. But even with that,
• 1:13
  Speaker 2: we're still expecting that, yes, OK, maybe the government will
• 1:16
  Speaker 2: drag the surplus forward a year or be slightly larger
• 1:21
  Speaker 2: when we eventually get there. There's still a bit of
• 1:23
  Speaker 2: water under the bridge between now and then. And of course,
• 1:26
  Speaker 2: we've got the selection campaign. The pre-fill, of course, the
• 1:29
  Speaker 2: opening of the books so that everyone's working off the
• 1:31
  Speaker 2: same assumptions and forecasts. But there's always that concern that
• 1:35
  Speaker 2: given how fast moving events are at the moment, those
• 1:38
  Speaker 2: forecasts might be a little bit more out of date
• 1:40
  Speaker 2: than we might first like.
• 1:41
  Speaker 1: So read it with a bit of a grain of salt.
• 1:44
  Speaker 2: Have a look at where those expectations around oil prices
• 1:47
  Speaker 2: and government interest rates are because again, they can start
• 1:51
  Speaker 2: to flip things around. There's a lot of debt that
• 1:53
  Speaker 2: government took on during the COVID period that is at
• 1:55
  Speaker 2: some point going to have to be refinanced, probably at
• 1:58
  Speaker 2: these high interest rates. And again, those fuel prices, they
• 2:01
  Speaker 2: are continuing to hit. And if they are sticking around
• 2:03
  Speaker 2: at higher levels, that does have risks around inflation and
• 2:06
  Speaker 2: everything else.
• 2:07
  Speaker 1: Brad Olsen, Infometrics.