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Speaker 1: Welcome to Our Fear and Greed, where we answer questions

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Speaker 1: about business, investing, economics, politics and more.

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Speaker 2: I'm on Mom Thompson and.

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Speaker 1: Hello suan Al.

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Speaker 2: I don't know what happened there. I almost forgot my

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Speaker 2: own name halfway through.

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Speaker 1: Look, great question today because it is one that I

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Speaker 1: was very curious about. And I just asked you in

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Speaker 1: passing in the office about GDP. Right, yes, And obviously

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Speaker 1: we have the data release tomorrow that we are very

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Speaker 1: excited about and we'll be covering in a great deal.

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Speaker 2: Of detail on the podcast. And I said to you,

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Speaker 2: is GDP? Is this the most important economic measure the

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Speaker 2: Is it the one that people pay more attention to

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Speaker 2: than any other and that everything is writing on this?

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Speaker 3: Yes, So I have thought about this because you gave

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Speaker 3: me twenty four hours notice, and I reckon it's the

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Speaker 3: most important economic indicator in hindsight, but not in the moment.

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Speaker 3: So when we do you like that?

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Speaker 1: Yeah?

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Speaker 3: So economic growth is the rate of growth that an

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Speaker 3: economy grows. I mean, that's self evident. The GDP grows

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Speaker 3: domestic product, that's all the output in an economy. So

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Speaker 3: let's say there's a billion units one year and one

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Speaker 3: point one billion units in next year. It's ten percent

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Speaker 3: economic growth. Okay, when we look back, we always look

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Speaker 3: back saying economies grew at this rate. And as economies

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Speaker 3: grow and expand when they're non inflationary. There's so many

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Speaker 3: factors in this, but broadly that's a good thing. You

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Speaker 3: get more. And if you think of when you were born, Michael,

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Speaker 3: many many years ago, but in the twenty years, I mean,

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Speaker 3: so you're older than that, but like since your education started,

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Speaker 3: let's say thirty years, what the world looks like now

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Speaker 3: compared to then is chalk and cheese, vastly different, you know,

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Speaker 3: and a lot of that is about economic growth. So

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Speaker 3: when you look back, you think economic growth is most important.

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Speaker 3: In the moment, however, not so sure. So the last

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Speaker 3: two or three years, the most important economic point was

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Speaker 3: absolutely so. When we're worrying, when the Reserve Bank and

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Speaker 3: the government's worrying about running the economy, it's not always

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Speaker 3: economic growth. It could be something else. So inflation, by far,

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Speaker 3: since COVID has been the biggest issue, the most important

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Speaker 3: economic data point. Employment until COVID, in fact, probably until

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Speaker 3: that's not true. Until about fifteen years ago, employment was

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Speaker 3: a big one in Australia, we were really at sort

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Speaker 3: of seven eight percent unemployment and that's what we worried

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Speaker 3: about all the time. We don't worry about employment anymore.

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Speaker 3: We're at four percent. We've got the gross domestic product

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Speaker 3: figures out to right, yep, that'll show us what happened

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Speaker 3: in March is backwards looking people say, well, that's what happened.

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Speaker 3: What about going forward? So I mean that's kind of

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Speaker 3: to my point. The most important thing looking back is growth,

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Speaker 3: but in the moment it could be one of many

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Speaker 3: other things.

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Speaker 2: Is it also the best then as a tool for

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Speaker 2: comparison globally?

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Speaker 3: Yeah, I think that's fair. So there's something called real

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Speaker 3: growth as well, real GDP, So that takes infation into

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Speaker 3: account and you can really compare across economies on that.

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Speaker 3: And you have economies like China which over the last

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Speaker 3: twenty years, their real GDP has been phenomenal compared to

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Speaker 3: other places, and it's now the world's second biggest economy

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Speaker 3: and that's kind of because of real GDP growing incredibly fast,

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Speaker 3: and so that is kind of your yardstick. But right now,

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Speaker 3: what is interesting right now is the last time the

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Speaker 3: Reserve Bank met and Michelle Bullock gave the press conference

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Speaker 3: after the board meeting. She kind of talked about inflation,

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Speaker 3: but then she started talking about economic growth again. And

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Speaker 3: so what we're seeing in the Astrainian economy at the

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Speaker 3: moment is a reserve being increasingly interested in economic growth.

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Speaker 3: So they're shifting their focus or their bias, because we've

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Speaker 3: got to focus on everything but their bias from inflation

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Speaker 3: to economic growth. Over the last week or so, we've

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Speaker 3: had poor retail sales figures, poor building approvals figures, poor

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Speaker 3: business investment. So economic growth is what we're going to

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Speaker 3: be paying more attention to, perhaps over the next twelve

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Speaker 3: months or so.

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Speaker 2: That is a fantastic answer, But I think the real

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Speaker 2: winner today was the question, because without a great question,

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Speaker 2: there is no.

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Speaker 3: There is no great answer, great answer point.

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Speaker 2: But no well done Sean.

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Speaker 1: All right, And if you have your own question, and

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Speaker 1: it doesn't need to be as good as that one,

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Speaker 1: but it can just be anything at all, head to

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Speaker 1: Fear and Greed dot com, dot Are you pop your

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Speaker 1: question in there, or we can go to any of

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Speaker 1: the social media platforms as well and to shoot your

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Speaker 1: message through and we will get to it as soon

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Speaker 1: as possible.

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Speaker 2: I'm Michael Thompson, and that was asked fear and great