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Cameron Bagrie: Independent Economist on Westpac's GDP forecasts · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Some more good economic news for you. Not that we're
• 0:02
  Speaker 1: feeling it yet, but don't worry, it's coming. Westpac have
• 0:04
  Speaker 1: upgraded their GDP forecast. In fact, they've doubled it for Q3, 2.8%.
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  Speaker 1: They're picking 3% growth for 2027. Cameron Bagri, independent economist
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  Speaker 1: with us this morning. Cameron, good morning.
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  Speaker 2: Good morning.
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  Speaker 1: So just, we didn't, it's not as bad as we
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  Speaker 1: thought it might have been because in the last forecast
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  Speaker 1: because of the war?
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  Speaker 2: Oh, I think that's a big chunk of it, but
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  Speaker 2: also I think if you strip things back, the underlying
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  Speaker 2: economy has been holding together an awful lot better. You
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  Speaker 2: have a look at the export and the import numbers,
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  Speaker 2: the stuff that's been coming in and out of the
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  Speaker 2: ports over the month of June and July have been
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  Speaker 2: pretty phenomenal. And obviously most of that is coming from
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  Speaker 2: regional growth. We're not seeing it yet in Auckland and Wellington,
• 0:45
  Speaker 2: but we are getting slowly back on track.
• 0:48
  Speaker 1: Yeah, we used to talk about rural versus urban, but
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  Speaker 1: now it's basically everywhere but Wellington and Auckland.
• 0:55
  Speaker 2: Yeah, pretty well. You get a completely different vibe if
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  Speaker 2: you're down in Otago, Southland, Canterbury, because this is an
• 1:02
  Speaker 2: export-led recovery. Obviously, down south, you've got tourism on top,
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  Speaker 2: but Christchurch's economic model has been moving places. You have
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  Speaker 2: a look at the growth in the student numbers coming
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  Speaker 2: through the University of Canterbury. Conversely, if you look at
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  Speaker 2: the property market, the property market traditionally being a pretty
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  Speaker 2: big driver of growth, particularly in the upper north, Auckland,
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  Speaker 2: the property market is stagnant at best.
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  Speaker 1: What does that mean for us going forward? If we're
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  Speaker 1: able to have a recovery that is not based on
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  Speaker 1: house prices going north or going through the roof, does
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  Speaker 1: that mean that we are on a more sustainable growth
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  Speaker 1: path or a better growth path?
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  Speaker 2: Well, what we're going through at the moment is that
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  Speaker 2: the economy is literally being rewired, replumbed, re-electrified. We have
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  Speaker 2: this old model of selling more expensive houses to each other,
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  Speaker 2: relying on migration. et cetera, et cetera, et cetera. That
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  Speaker 2: model was never politically or economically sustainable because you take
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  Speaker 2: house prices up 6% and income growth is going at 4%, well,
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  Speaker 2: you're going to have an affordability problem, which we had
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  Speaker 2: an affordability problem. Of course, you get blowback towards migration
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  Speaker 2: as well. We're getting back to a little bit of
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  Speaker 2: what's common sense, the basics, productivity growth, business investment, using
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  Speaker 2: natural resources, and what we also need on top is
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  Speaker 2: better economic policy. Great, great, great.
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  Speaker 1: Cameron Begri, independent economist. Good to have you on the
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  Speaker 1: show as always, Cameron. For more from Early Edition with
• 2:27
  Speaker 1: Ryan Bridge, listen live to Newstalk ZB from 5am weekdays
• 2:32
  Speaker 1: or follow the podcast on iHeartRadio.