Latest / Best of Business / Perspective with Heather du Plessis-Allan: The pressure's on the RBNZ to fix the economy - fast

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Perspective with Heather du Plessis-Allan: The pressure's on the RBNZ to fix the economy - fast · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from news Talk set be
• 0:12
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• 0:16
  Speaker 2: Well, I think it's fair to say that the GDP
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  Speaker 2: print has come in. It's something of a shock. The
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  Speaker 2: Reserve Bank was picking a contraction of zero point three percent.
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  Speaker 2: The consensus was a contraction of zero point four percent.
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  Speaker 2: The worst case prediction from one of the banks was
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  Speaker 2: a contraction of zero point five percent. It's come in
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  Speaker 2: at a contraction of zero point nine percent, which is
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  Speaker 2: basically twice as bad as most of us thought. Now,
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  Speaker 2: the immediate problem that we have is what this is
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  Speaker 2: going to do to confidence, because people are already scared.
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  Speaker 2: That is why it's taking this country so long to
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  Speaker 2: come out a reception recession, because every single piece of
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  Speaker 2: bad news, like Trump's tariffs earlier this year, freaks us
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  Speaker 2: out all over again, so we keep our wallets shut
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  Speaker 2: for longer. There are people out there who absolutely can
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  Speaker 2: afford to spend more money. They are choosing not to
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  Speaker 2: because they do not know that they can trust that
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  Speaker 2: we're through the worst of it. This is part of
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  Speaker 2: the reason, if not one of the bigger reasons, why
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  Speaker 2: the Reserve banks cuts to the ocr are not stick
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  Speaker 2: emulating the economy like the Bank thought that they should be.
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  Speaker 2: And this number that we see today, I fear is
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  Speaker 2: going to do this all over again. It's going to
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  Speaker 2: freak us out all over again. And I think the
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  Speaker 2: reason we're going to be freaked out all over again
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  Speaker 2: by this is that we think that the people who
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  Speaker 2: are in charge, mainly the Reserve Bank but also the government,
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  Speaker 2: who keep telling us that the economy is definitely recovering,
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  Speaker 2: really have no idea how bad this is now. I
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  Speaker 2: think it is a little unfair to blame anyone but
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  Speaker 2: the Reserve Bank right now, because they really deserve it.
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  Speaker 2: The verdict is in on this now, isn't it. They
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  Speaker 2: have well and truly stuffed this up. They have no
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  Speaker 2: idea what is going on in this economy. In July,
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  Speaker 2: which is only one month after Q two ended, right,
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  Speaker 2: we've just gone through this massive contraction. In the next month,
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  Speaker 2: they decided they didn't need to cut the cash rate anymore.
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  Speaker 2: They held the cash rate that now should blow your mind.
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  Speaker 2: Just a month ago they released their Monetary Policy statement
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  Speaker 2: forecasting the contraction at only zero point three percent. They
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  Speaker 2: got it wrong by a factor of three. Now what
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  Speaker 2: them getting it so badly wrong now means is that
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  Speaker 2: the pressure is on them to fix this, and fix
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  Speaker 2: this fast, and do a double cut in October. Really
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  Speaker 2: more to restore confidence than anything, because confidence is what
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  Speaker 2: we are very much lacking at the moment.
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