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Matt Gault: ANZ Senior Economist on the Q4 GDP result · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Quarter forard GDP was er point two percent growth. That's good,
• 0:03
  Speaker 1: but lower than expected. And this was all pre war.
• 0:06
  Speaker 1: Of course, Matt guilt Is aims at senior economists. Mat
• 0:08
  Speaker 1: good morning, good morning. So we're still growing, so that's good.
• 0:13
  Speaker 2: Yeah, So it's good to see a small amount of growth.
• 0:16
  Speaker 2: And if you look across the wider set of indicators
• 0:19
  Speaker 2: across the second half of twenty twenty five, it did
• 0:22
  Speaker 2: look late. There was a modest recovery getting going. But
• 0:26
  Speaker 2: over all the data yesterday it was a bit disappointing
• 0:29
  Speaker 2: to not see more growth there, given there were some
• 0:33
  Speaker 2: pretty decent tail winds last year like lower interst rates
• 0:36
  Speaker 2: and high high prices for meat and dairy farmers.
• 0:39
  Speaker 1: Also where the growth coming from, Matt, Rental hiring, real
• 0:42
  Speaker 1: estate services the largest contributors. That does that sound like momentum.
• 0:48
  Speaker 2: Yeah, we didn't see a whole heap of momentum there.
• 0:52
  Speaker 2: There was a bit of growth in some service industries,
• 0:54
  Speaker 2: late rental hiring, in real estates in other areas, but
• 0:59
  Speaker 2: not a whole lot of growth. And a lot of
• 1:01
  Speaker 2: the more domestically oriented part of the economy, parts of
• 1:04
  Speaker 2: the economy like construction and manufacturing was disappointing as well. So, yeah,
• 1:10
  Speaker 2: a few parts of the economy growing, but it wasn't
• 1:13
  Speaker 2: really firing. How careful.
• 1:15
  Speaker 1: We've obviously now moved on to very quickly to what's
• 1:17
  Speaker 1: going on over in the Middle East. Scope to delay
• 1:21
  Speaker 1: ocr hikes, you know, given that this number was less
• 1:25
  Speaker 1: than what the Reserve Bank was picking half a percent, right,
• 1:27
  Speaker 1: we've got point two. Does that give them more scope
• 1:30
  Speaker 1: to delay hikes?
• 1:33
  Speaker 2: It does, we'd say yes. So the Reserve Bank, we
• 1:37
  Speaker 2: thought would already be reasonably cautious about this oil price
• 1:41
  Speaker 2: shot compared to a lot of other central banks overseas,
• 1:45
  Speaker 2: just given that the New zeal And economy is not
• 1:47
  Speaker 2: coming from an especially strong starting point. So definitely inflation
• 1:52
  Speaker 2: will rise with oil prices going up as much as
• 1:56
  Speaker 2: they have, But the real concern for the Reserve Bank
• 1:59
  Speaker 2: will be with that that's increase in oil prices spills
• 2:02
  Speaker 2: over into generalized inflation things like wages and other prices,
• 2:09
  Speaker 2: and with the economy in a relatively weak state, we
• 2:12
  Speaker 2: think they'll be less worried about that than places like Australia,
• 2:17
  Speaker 2: where the economy is firing more strongly.
• 2:20
  Speaker 1: Yeah, it's hotter than most parts of the country right now.
• 2:23
  Speaker 1: How careful does the government here need to be, Matt
• 2:26
  Speaker 1: about fiscal stimulus because it's so tempting and the Italians
• 2:30
  Speaker 1: overnight have gone for it, George, and Maloney has got
• 2:33
  Speaker 1: a constitutional referendum this weekend, so she's cutting fuel excise
• 2:37
  Speaker 1: because she's got political agendas. How careful do they need
• 2:40
  Speaker 1: to be with fiscal stimulus given the inflation projection and
• 2:44
  Speaker 1: possibility from the war.
• 2:46
  Speaker 2: There was certainly a lot learned from the COVID nineteen
• 2:49
  Speaker 2: pandemic about fiscal stimulus, where lots of countries around the
• 2:55
  Speaker 2: world really use fiscal stimulus stimulus heavily to respond to
• 3:00
  Speaker 2: the pandemic, and it did contribute to inflation around the world.
• 3:05
  Speaker 2: So the government's well, they are already showing signs are
• 3:07
  Speaker 2: being quite cautious about that. They're talking about the school
• 3:10
  Speaker 2: support being targeted and temporary and quite narrow, and that's
• 3:18
  Speaker 2: what you'd want to see when inflation is coming from
• 3:21
  Speaker 2: a not very comfortable starting point and going higher. So
• 3:26
  Speaker 2: it is sensible that they're being cautious not to push
• 3:30
  Speaker 2: inflation higher with their fiscal response.
• 3:33
  Speaker 1: Appreciate your time this morning, Matt. Matt goldain Zed Senior Economist.
• 3:37
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• 3:40
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• 3:43
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