Latest / Best of Business / Satish Ranchhod: Westpac senior economist on consumer confidence going up in June

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Satish Ranchhod: Westpac senior economist on consumer confidence going up in June · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks Be follow
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  Speaker 2: Gavin Gray is with us out of the UK shortly.
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  Speaker 2: I have got that tip line for you, so stand by.
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  Speaker 2: We're going to get to it twenty five away from
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  Speaker 2: seven now. Consumer confidence has improved, but we're still overall
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  Speaker 2: more pessimistic than optimistic about the economy. That is from
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  Speaker 2: the latest Westpac consumer Confidence survey for the June quarter,
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  Speaker 2: comes after confidence dropp quite sharply in the first three months.
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  Speaker 3: Of the year.
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  Speaker 2: You'll recall Satish Ranshot as Westpac senior economist.
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  Speaker 3: Hastish good evening, Heather, Do you think this.
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  Speaker 2: Is material information? Is this adding to the data suggesting
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  Speaker 2: that we're in recession again?
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  Speaker 3: I think it really highlights that the middle part of
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  Speaker 3: the year has been pretty tough for a lot of households.
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  Speaker 3: We're still seeing a lot of pressure from rising costs
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  Speaker 3: of essentials and generally we're seeing a lot of negative news,
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  Speaker 3: especially on the global front, that is worrying a lot
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  Speaker 3: of households.
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  Speaker 2: Do you think that things are going to improve once
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  Speaker 2: we start getting those rate cuts heading our heading our
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  Speaker 2: bank accounts.
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  Speaker 3: I do think we are going to see some bitter
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  Speaker 3: times for a lot of households in the second half
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  Speaker 3: of the year. As you say, we've had some big
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  Speaker 3: drops and interest rates about two hundred basis points for
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  Speaker 3: a lot of mortgage rates, but a lot of households
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  Speaker 3: haven't rolled over on their mortgage yet. As we go
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  Speaker 3: through that second half of the year, a lot of
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  Speaker 3: households could be seeing a lot more money in their
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  Speaker 3: back pockets as their mortgage rates drop.
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  Speaker 2: Okay, So tell me how you think, because we've got
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  Speaker 2: the GDP data coming out tomorrow, right, tell me how
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  Speaker 2: you think the year looks in terms of the economic
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  Speaker 2: growth story quarterback critical.
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  Speaker 3: I think it's probably going to be a bit soft
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  Speaker 3: through the middle part of the year. Tomorrows speakers are
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  Speaker 3: probably going to show the economy grew by about points
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  Speaker 3: even it's sort of around a trend rate. Probably a
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  Speaker 3: little bit mixed across the economy. But really, if we're
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  Speaker 3: looking for a pack up and activity, we're going to
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  Speaker 3: see it more through that latter part of the year,
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  Speaker 3: with both those interest rate cuts heading people's back pockets,
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  Speaker 3: but also more of that income from high commodity prices
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  Speaker 3: really flowing through the economy and their agricultural boost. That'll
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  Speaker 3: be really important for our lot of regions.
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  Speaker 2: So are you saying, okay, so we get we get
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  Speaker 2: this the uptick in the first quarter, uptick in the
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  Speaker 2: last quarter, and in between those two quarters. Technical recession.
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  Speaker 3: Probably more of a little bit of softness rather than
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  Speaker 3: a technical recession. I think there are some positives out
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  Speaker 3: there for the economic tourisms are bright spot. That's improving
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  Speaker 3: those agricultural export incomes. They are looking great for a
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  Speaker 3: lot of regions. But it's really more of a gradual
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  Speaker 3: picture for households. But things are slowly getting better.
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  Speaker 2: Okay, But statish, what we have seen in the last
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  Speaker 2: two or three years now is that the data goes
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  Speaker 2: it's lumpy, it goes up, it goes down, and goes
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  Speaker 2: up and goes down. But essentially, per capita, we're just
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  Speaker 2: this really long recession. Does it just continue through this year?
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  Speaker 2: Does it?
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  Speaker 3: I don't think it's going to keep getting worse. It
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  Speaker 3: might be a little bit soggy. In the NETTA. We
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  Speaker 3: have still been dealing with some pretty powerful financial pressures
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  Speaker 3: like increases and living costs, but slowly some of those
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  Speaker 3: pressures are easing off and especially those lower interest rates.
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  Speaker 3: That'll be a relief for a lot of households.
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  Speaker 2: When do we start When do we get out of
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  Speaker 2: this bit though, where we're talking about it easing off
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  Speaker 2: and getting better, and we're actually now we're into positive territory.
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  Speaker 2: We're firmly above the zero and we can say we're
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  Speaker 2: growing again properly.
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  Speaker 3: And I think by the time we get to the
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  Speaker 3: end of this year, things will really start to feel
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  Speaker 3: different for many parts of the economy. Our labor market
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  Speaker 3: has been soggy, but slowly we'll start to see more
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  Speaker 3: people being hired, as household spending picks up, and as
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  Speaker 3: more of those farming incomes the lift. We are already
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  Speaker 3: starting to see incomes and spending rights in many parts
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  Speaker 3: of the country.
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  Speaker 2: Okay, now, I don't want to say I don't want
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  Speaker 2: to be a negative ninni here, but we said this
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  Speaker 2: last year eight We said just survive to twenty five
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  Speaker 2: and then it's bright all the way through. And you're saying, basically,
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  Speaker 2: don't worry, it'll be bright next year. What are the
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  Speaker 2: chances that you're wrong?
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  Speaker 3: I mean, if something's going to surprise us, it's probably
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  Speaker 3: going to be coming from the global economy. I mean,
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  Speaker 3: we've seen the headlines recently, especially coming from the midd East.
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  Speaker 3: There's ongoing concerns about tariffs. But if we think about
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  Speaker 3: the domestic story, it is looking better. It's great that
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  Speaker 3: we can manage that global out look right now. I
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  Speaker 3: think things are looking better, but there are those risks
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  Speaker 3: that will have to keep an eye on.
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  Speaker 2: Okay, fingers cross, Fingers cross, Satish, thanks so much, as
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  Speaker 2: I always really appreciate it. Satish Ranshod wespect senior economists.
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