Latest / Best of Business / Paul Bloxham: HSBC chief economist on whether Australia's OCR will be adjusted in February

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Paul Bloxham: HSBC chief economist on whether Australia's OCR will be adjusted in February · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk zed B.
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  Speaker 2: Bryan Bridge Time you how to catch up with rockstar
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  Speaker 2: economist HSBC's Paul Bloxham. The Australian Financial Review has just
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  Speaker 2: named him the best economic forecaster in Australia for calling
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  Speaker 2: every decision by the RBA correctly last year. They didn't
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  Speaker 2: charge the change the ocr the entire year, so he
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  Speaker 2: basically had one answer the whole time. Paul Good evening, Good,
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  Speaker 2: I how much did you pay the Australian Financial Review.
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  Speaker 3: No, it doesn't work that way that way, but it's
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  Speaker 3: a very nice bit of recognition that we're very appreciative of.
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  Speaker 3: As you say, we had the view all through last
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  Speaker 3: year that the RBA wasn't going to be able to
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  Speaker 3: cut interest rates, and I think we got there for
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  Speaker 3: the right reason. We talked a lot about the fact
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  Speaker 3: that productivity was weak and that the supply side of
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  Speaker 3: the economy was still constrained, and that that was the
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  Speaker 3: primary reason they just won't get to get there. So
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  Speaker 3: it's nice for that to have turned out.
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  Speaker 4: To be right.
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  Speaker 2: Yet you are expecting a cut this month.
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  Speaker 4: That's right, we do. We think the RBA is going
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  Speaker 4: to be able to cut interest rates this year, and
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  Speaker 4: that view again, we've had that for a while. We
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  Speaker 4: now think it's likely to be at their meeting that
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  Speaker 4: comes up in a couple of weeks times, so the
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  Speaker 4: February meeting. And you know, part of the story there
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  Speaker 4: is that inflation has gradually headed towards the RBA's target.
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  Speaker 4: It's moving a little bit faster towards their target than
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  Speaker 4: they had anticipated late last year. And in addition to that,
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  Speaker 4: we've got global risks as well that we you know,
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  Speaker 4: we can see playing out every day at the moment
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  Speaker 4: in terms of the global trade developments and US policy
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  Speaker 4: developments and so on, and so we think that's going
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  Speaker 4: to factor in a little bit as well. And all
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  Speaker 4: in all, we think the RBA is going to be
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  Speaker 4: able to start to be able to lower its policy
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  Speaker 4: rate deliver a bit of support for the economy.
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  Speaker 2: How is Australia going to be impacted by the Trump Well,
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  Speaker 2: I mean, we say Trump's terrorists, but he's put them
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  Speaker 2: on and then he's taken them off already within the
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  Speaker 2: space of twenty four rousing there at the negotiating table.
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  Speaker 2: So as best you can, crystal Ballgay is about what
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  Speaker 2: impact it could have.
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  Speaker 4: Well, I think the first thing we know is that
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  Speaker 4: going to it's creating uncertainty. I mean, that's quite clear
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  Speaker 4: from just the way you described it. And that uncertainty
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  Speaker 4: makes it you know, means that I think overall it
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  Speaker 4: is it is a downside risk for global growth because
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  Speaker 4: uncertainty means that it's more difficult to make investment decisions,
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  Speaker 4: it's more difficult to make decisions in general. And I
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  Speaker 4: think this story has got further to play out, So
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  Speaker 4: I think that possible downside risk to global growth is
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  Speaker 4: something we need to factor in terms of thinking about
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  Speaker 4: what's going on. That said, you know, what happens in
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  Speaker 4: terms of US policy is not the primary driver in
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  Speaker 4: terms of its US effect on the effect on the
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  Speaker 4: US economy on Australia or New Zealand. That the primary
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  Speaker 4: question is what the policy changes that affect China and
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  Speaker 4: then how does do Chinese policy makers respond? And that's
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  Speaker 4: something we're also watching play out at the moment, and
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  Speaker 4: we'll just have to see how that plays because that's
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  Speaker 4: the most important feature factor in terms of driving what
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  Speaker 4: happens in Australia and New Zealand. They are you know,
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  Speaker 4: Asia is our major instead of trading partners.
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  Speaker 2: Ye're true, And so far they've just been making noises
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  Speaker 2: about going to the wt O that kind of thing.
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  Speaker 2: But yeah, it has the potential to get quite gnally.
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  Speaker 4: I think it's going to be very very interesting times
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  Speaker 4: to watch what's going on, and it's going to be
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  Speaker 4: difficult to navigate how in terms of in terms of
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  Speaker 4: how you think about these various developments. But you know, nonetheless,
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  Speaker 4: I think I think, obviously it's what's happening, so we
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  Speaker 4: need to keep that in mind, and I think, as
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  Speaker 4: I say, we need to watch out for what happens
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  Speaker 4: in terms of policy developments, not just in the US
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  Speaker 4: of course, but what the retaliation is from other countries
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  Speaker 4: and particularly in Asia.
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  Speaker 2: Nice one, Paul, thank you very much for that. Enjoy
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  Speaker 2: the award. Did you get a trophy or something for
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  Speaker 2: that or just a nod in the paper?
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  Speaker 4: Just a nod in the paper, that's enough, Thank Paul.
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  Speaker 2: Thanks for that, Paul blox And with HSBC now the
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  Speaker 2: reason we call on the rockstar economists. You'll probably know this,
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  Speaker 2: but back in the day when John Key was in power,
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  Speaker 2: he declared that we had the rock star economy of
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  Speaker 2: the world and has since done many, many interviews, and
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  Speaker 2: every time he comes back for an interview, the poor guy.
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  Speaker 2: We used to do it on Telly as well, So
• 4:19
  Speaker 2: what is it? What's your new label for our economy?
• 4:22
  Speaker 2: And he'd have to come up with some stupid name
• 4:24
  Speaker 2: just just to try and compete with the first one
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  Speaker 2: he gave. By the way, they've never been as good since,
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  Speaker 2: have they.
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