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Brad Olsen: Infometrics Principal Economist predicts what upcoming GDP result says about economy · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. There'd be
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  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio. Now.
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  Speaker 2: The state of the economy will be revealed on Thursday
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  Speaker 2: when the GDP for Q two is out. It's widely
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  Speaker 2: expected that GDP went backwards again. Brad Olsen is info
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  Speaker 2: Metrics principle economist and with us now ay Brad, good evening,
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  Speaker 2: what do you reckon? What are you picking?
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  Speaker 3: The Infanmetrics pick is a point two percent quarterly fall,
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  Speaker 3: so sort of in the middle of the range by
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  Speaker 3: the Oxford of most of the major forecasts. Everyone in
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  Speaker 3: New Zealand looking like the packing sort of anywhere between
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  Speaker 3: point one and point five percent down. Long story short,
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  Speaker 3: that doesn't sound huge, but it's that continuation of weaker
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  Speaker 3: and weaker economic conditions and we're likely to probably see
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  Speaker 3: that persist for the rest of this year. Of course,
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  Speaker 3: we're wanting to get a bit of a gauge on
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  Speaker 3: how different parts of the economy are going. We know that,
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  Speaker 3: for example, healthcare has still been quite a large growing area,
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  Speaker 3: but we'll be looking at or trying to get a
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  Speaker 3: bit more detail on how households are feeling. If there's
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  Speaker 3: you know, how bad and a sense investment decisions are
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  Speaker 3: getting So a lot of details that will be picking
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  Speaker 3: over on Thursday. But again, that activity here there was
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  Speaker 3: what three months ago now, so it is very much
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  Speaker 3: in the rearview mirror will be also, I mean comparing
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  Speaker 3: some of those figures with some of the more recent
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  Speaker 3: economic indicators to try and give us a gauge for
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  Speaker 3: how challenging the economy still is and maybe when we're
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  Speaker 3: expecting it to turn around the other way.
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  Speaker 2: So what we're seeing at the moment, obviously, thank godness,
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  Speaker 2: is all the interest rates coming back, the home loan
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  Speaker 2: lending rates. How long before we actually start to see
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  Speaker 2: this playing a role in GDP?
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  Speaker 3: Look, I think it's probably another almost six to nine
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  Speaker 3: months away, just because of how long it's going to
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  Speaker 3: take for all of those households to refix onto lower
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  Speaker 3: mortgage rates. I mean, but you're right, it's probably a
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  Speaker 3: little bit quicker than normal economic downturns in a sense
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  Speaker 3: because households have been primed for lower interest rates. And
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  Speaker 3: let's be clear, I feel like the downslide at the
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  Speaker 3: moment in mortgage rates is probably faster than any of
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  Speaker 3: us predicted. You know, I saw another of the major
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  Speaker 3: banks cut their rates today that now I think the
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  Speaker 3: one year is sitting at something like six point two nine,
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  Speaker 3: so things really are starting to move now. Of course,
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  Speaker 3: not every household refixes their mortgage three seconds later, so
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  Speaker 3: it will take a bit of time. And what we're
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  Speaker 3: sort of thinking at the moment is that the next
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  Speaker 3: six to nine months is probably going to be dominated
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  Speaker 3: by fewer job opportunities coming through, further increases to unemployment.
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  Speaker 3: But get through to twenty twenty five. As people are
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  Speaker 3: refixing their mortgages, they've got a bit more spare cash,
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  Speaker 3: they're spending a bit more in the economy, there's more
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  Speaker 3: jobs that come forward, and that's when we think that
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  Speaker 3: economic mojo comes back a bit.
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  Speaker 2: It's good to talk to you, Brad always as thank
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  Speaker 2: you very much mate, look after yourself. It's Brad Olson,
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  Speaker 2: INFIMETRICX principle Economists.
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