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Cameron Bagrie: Independent Economist on GDP growth · Early Edition with Ryan Bridge

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  Speaker 1: The economy is rebounded into one point one percent growth
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  Speaker 1: in the September quarter, ahead of forecasts. Economists have been
• 0:07
  Speaker 1: picking a rise of between point eight and one percent.
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  Speaker 1: Business services, manufacturing, and construction led the recovery. Finally, some
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  Speaker 1: signs of life in the economy. Independent economist Cameron Bagrie
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  Speaker 1: joins me. Now, good morning, Cameron, thanks for your time.
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  Speaker 2: Not good morning from comors.
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  Speaker 1: Okay, is it too early to celebrate?
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  Speaker 2: Oh, this economy's got forward propulsion. If you ever look
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  Speaker 2: at the second quarter number, what I've got revised down
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  Speaker 2: to minus one percent, we're center plus one point one
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  Speaker 2: in September quarter. Do I think those two quarters, that
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  Speaker 2: down and the up were a fair reflection of the economy.
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  Speaker 2: The answer is no. I think there's a little bit
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  Speaker 2: of underlying noise across the flat overall was probably about right.
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  Speaker 2: But if you look at most of the indicators, lo,
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  Speaker 2: your GDP obviously ours were concrete pored you look at
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  Speaker 2: bank lending into the business sector in the month of Octiger. Yeah,
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  Speaker 2: there's a there's a pretty deep array of green shoots
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  Speaker 2: there that are starting to shelves a pretty consistent story.
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  Speaker 2: We've got forward propulsion. Are we knocking the ball out
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  Speaker 2: of the park as a one point one quarterly rise
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  Speaker 2: would imply the answer is no, But we be back
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  Speaker 2: on the positive side of the leisure, which is the
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  Speaker 2: one thing.
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  Speaker 1: We want do we Why have the previous quarters and
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  Speaker 1: compared to this quarter, why have they been kind of
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  Speaker 1: up and down? What's been contributing to that?
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  Speaker 2: Well, you can have a look at some yet one
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  Speaker 2: off such as your messinex shutting down production. I think
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  Speaker 2: Statistics zone has got a little bit of noise going
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  Speaker 2: on with their what's called seasonal factors, your pre cod
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  Speaker 2: verse post COVID. You've seen different changes and behavior which
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  Speaker 2: is knocked around some of the balancing items as well. Yeah,
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  Speaker 2: so sometimes when you see that sort of noise within
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  Speaker 2: economic data, you just need to step back sometimes and
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  Speaker 2: take a little bit of deep breath. And I think
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  Speaker 2: there's a bit of an overreaction towards the negative number.
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  Speaker 2: It's going to little be a little bit of overreaction
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  Speaker 2: in regard to hype towards the positive number. But your
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  Speaker 2: net on net, the economy is definitely moving forward.
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  Speaker 1: Do you think that's going to held down now? Do
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  Speaker 1: you think we can expect more steady GDP results going forward.
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  Speaker 2: I wouldn't say we've got to expect steady GDP results
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  Speaker 2: that are going forward. It's still like a two steps forward,
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  Speaker 2: one step back economy. We've got massive cycical col wins.
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  Speaker 2: If you look at the farming sector. The farming sector
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  Speaker 2: has done pretty well in regard to the combination of commodity prices,
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  Speaker 2: low U seal on dollar, but the heat's starting to
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  Speaker 2: come out of those dairy prices, so we're keeping a
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  Speaker 2: close eye on that. For twenty twenty six, you got
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  Speaker 2: the Fontpira injection of about two point one billion into
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  Speaker 2: the economy. You've got the rolling impact of lower interest rates,
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  Speaker 2: You've got investment boost. Yes, there's an awful lot of
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  Speaker 2: cyclical support. What we've also got is some pretty massive
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  Speaker 2: structural headwinds, and one of the big ones it's just
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  Speaker 2: your energy prices, the d industrialization of New Zealand as
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  Speaker 2: we respond to high gas prices. We've got still continued
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  Speaker 2: weak productivity growth. Here's still a little bit of nervous
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  Speaker 2: us out there towards the property market. Your people are
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  Speaker 2: cleaning up balance. It's yes, cypical support, there's still a
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  Speaker 2: whole lot of structural factors that we need to get
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  Speaker 2: on top of. Before you called it, what there is
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  Speaker 2: a stay in growth, period of consistency.
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  Speaker 1: Now it feels like we've sort of peaked a look
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  Speaker 1: around the corner as opposed to heating sort of into
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  Speaker 1: a booming recovery, doesn't it.
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  Speaker 2: Yeah, Well, this recovery, I don't think it's going to
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  Speaker 2: be like your normal what's called cycrocal recovery, which is
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  Speaker 2: normally of the VPA. Right, you go down pretty hard
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  Speaker 2: and then you come back up pretty aggressive the other side,
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  Speaker 2: as monetary policy works at magic on the intrasensitive parts
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  Speaker 2: of the economy, Construction, residential, property, retailing trivially respond and
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  Speaker 2: a pretty aggressive fection factor. Yeah, because we've got those
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  Speaker 2: structural headwinds, and the property market is still about double
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  Speaker 2: evaluation it was in two thousands. So property prices have
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  Speaker 2: come down, but property prices are not cheap what they
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  Speaker 2: were twenty to thirty years ago. Yes, you've got these
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  Speaker 2: structural constraints on the magnitude of this economic upsweating that
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  Speaker 2: people are penciling in. Are we going to see it
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  Speaker 2: up swing? Yes? Is it going to be a four
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  Speaker 2: to five percent growth up swing which you've seen historically
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  Speaker 2: when you hit the wall, which we did hit the wall. Yeah,
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  Speaker 2: the answer is no. Now, I think expectations a sort
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  Speaker 2: of two to three percent growth in the next door
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  Speaker 2: to twelve months are are pretty reasonable.
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  Speaker 1: Cameron, as always, really appreciate your thoughts. Have a lovely Christmas.
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