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Cameron Bagrie: Independent economist on the inflation rate ahead of the CPI update · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: We're going to get our official inflation number for the
• 0:02
  Speaker 1: year twenty twenty five, and economists are picking three percent
• 0:05
  Speaker 1: or above, which would come in above the Reserve Bank's
• 0:09
  Speaker 1: forecast of two point seven percent. So independent economists. Cameron
• 0:13
  Speaker 1: Bagary joins and now go going to you, Cameron, My
• 0:16
  Speaker 1: good morning. What's your pick?
• 0:19
  Speaker 2: I think we obviously a number round point five one
• 0:22
  Speaker 2: percent point five percent are in the quarter percent for
• 0:25
  Speaker 2: the year on year, the Reserve Bank expecting number a
• 0:28
  Speaker 2: little lower. And when numbers tend to come a little
• 0:31
  Speaker 2: bit higher on what the reserve banks expecting on the
• 0:32
  Speaker 2: inflation front, markets tend to pull back from the expectations.
• 0:35
  Speaker 2: So the sea moving down, and think markets now starting
• 0:38
  Speaker 2: the stink the sea is going to be moving up
• 0:40
  Speaker 2: in two thousand and twenty six.
• 0:43
  Speaker 1: Did you say you think it will be moving up?
• 0:46
  Speaker 2: Well, that's what markets participate at the moment. That's allsom
• 0:49
  Speaker 2: my own sort of personal view. Inflation is looking to
• 0:52
  Speaker 2: be a little bit sort of sticky towards the top
• 0:54
  Speaker 2: end of the targets. The target sign is one to
• 0:57
  Speaker 2: three percent. We got down to two point two. We've
• 0:59
  Speaker 2: bounced back up the pre You've got an economy that's
• 1:01
  Speaker 2: turned in the corner that suggests that the disinflationary pressure
• 1:05
  Speaker 2: to take it back down to two percent is not
• 1:08
  Speaker 2: quite going to be there. So it looked like the
• 1:10
  Speaker 2: OCR this stage is probably a little bit too low
• 1:13
  Speaker 2: for where the economy is and where inflatave re pressures
• 1:16
  Speaker 2: are so extect the OCR at some stage and then
• 1:20
  Speaker 2: ex sort of twelve months to go a little bit higher,
• 1:22
  Speaker 2: emphasis on a little bit higher, not a lot higher.
• 1:24
  Speaker 1: Now the big pressure is from things that are non tradable,
• 1:27
  Speaker 1: you know, things like electricity and rates and stuff like that.
• 1:30
  Speaker 1: That that's always distorting everything, isn't it.
• 1:34
  Speaker 2: It is in terms of the year and year the numbers. Yeah,
• 1:38
  Speaker 2: if you go back and you have a look at
• 1:39
  Speaker 2: inflation repressure for most of the two thousand sort of error,
• 1:44
  Speaker 2: we managed to keep inflation pretty low to low two percent,
• 1:49
  Speaker 2: and a lot of that was because of the low
• 1:51
  Speaker 2: non low platable inflation, imported goods, cheap stuff out of China.
• 1:58
  Speaker 2: If you look at where we are at the moment,
• 2:01
  Speaker 2: obviously we've got the impact of the lower U see
• 2:03
  Speaker 2: on DOTAR, which tends to push up imput prices. Your
• 2:06
  Speaker 2: export prices were obviously pretty good for the farmers. Not
• 2:10
  Speaker 2: so good for people that are buying red meat at
• 2:12
  Speaker 2: the supermarket. And what we're also seeing there is you
• 2:15
  Speaker 2: administrative charges from central and love of government. They're running
• 2:19
  Speaker 2: pretty hot. You've got rates that are running pretty hot.
• 2:23
  Speaker 2: You've got alectricity gas prices that are running pretty hot
• 2:26
  Speaker 2: as well. So you've got a certain persistence stickiness to
• 2:30
  Speaker 2: non trade of inflation or parts of non trade of inflation.
• 2:32
  Speaker 2: But your strip goes out in non trading inflation. Your
• 2:36
  Speaker 2: house and prists, your rents, you know, those sort of
• 2:38
  Speaker 2: things are pretty soft wide because the economy has been
• 2:41
  Speaker 2: pretty weak. When the economy has been pretty weak, firms
• 2:44
  Speaker 2: can't tend to pass on pricing places. It's a real
• 2:47
  Speaker 2: too dead story out there in regard to what we're
• 2:49
  Speaker 2: seeing in regard to inflation.
• 2:50
  Speaker 1: Meanwhile, the election is coming up. We've got three hundred
• 2:53
  Speaker 1: days before we head to the polls once again, and
• 2:54
  Speaker 1: obviously the economy is going to be front and center
• 2:57
  Speaker 1: in terms of all the parties and what they debate.
• 2:59
  Speaker 1: So what do you think is going to happen over
• 3:01
  Speaker 1: the year and which party will be in the best
• 3:03
  Speaker 1: position to, you know, to take advantage of it.
• 3:09
  Speaker 2: Well, it depends what you look at. If you look
• 3:10
  Speaker 2: at traditionally, a stronger economy tends to be good for
• 3:13
  Speaker 2: the incumbents, and obviously the economy if you look at
• 3:16
  Speaker 2: just about the audo economic indicators is your wee can pencil,
• 3:19
  Speaker 2: and the twenty twenty six is going to be a
• 3:20
  Speaker 2: head of a lot better than twenty twenty five. I
• 3:23
  Speaker 2: don't think the cloney is going to be knocking the
• 3:24
  Speaker 2: ball out of the part but we've certainly got fourth
• 3:26
  Speaker 2: pulsion and motor in part Land. We're probably going to
• 3:29
  Speaker 2: be running along the motorway about third year, but we'd
• 3:32
  Speaker 2: like to be in fourth or fifth, and I don't
• 3:33
  Speaker 2: think we got quite going to be the year, but
• 3:35
  Speaker 2: third year is an awful lot better than reverse which
• 3:37
  Speaker 2: would be so that's good for the incumbents of the
• 3:40
  Speaker 2: sticking fort the incumbents. I think it is going to
• 3:41
  Speaker 2: be inflation number one issue out there across you see
• 3:45
  Speaker 2: on at the moment. It's cost all of them, and
• 3:48
  Speaker 2: inflation so opens money out of people's pockets. And I
• 3:51
  Speaker 2: think inflation is going to end up settling in the
• 3:53
  Speaker 2: two and a half to three percent of his own
• 3:55
  Speaker 2: in places setters and the two and a half three
• 3:57
  Speaker 2: percent of his own I think that's going to be
• 3:59
  Speaker 2: a problem for the incumbent governments. There's a glass up
• 4:02
  Speaker 2: fall and there's a glass op eaty story in regard
• 4:04
  Speaker 2: to what the economic immigrat is going to be telling both.
• 4:06
  Speaker 1: That fascinating. Kevin Bagree, I thank you for your insight.
• 4:09
  Speaker 1: That is Cameron. He is the interpendent economist. For more
• 4:12
  Speaker 1: from Early Edition with Ryan Bridge, Listen live to News
• 4:15
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• 4:18
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