1
00:00:00,120 --> 00:00:03,960
Speaker 1: You data into our economy. ASB see some stabilization driven

2
00:00:04,000 --> 00:00:06,080
Speaker 1: by those interest rates the primary sector and some rising

3
00:00:06,080 --> 00:00:09,160
Speaker 1: consumers spending. But for the car nuts, we are, according

4
00:00:09,200 --> 00:00:12,039
Speaker 1: to ASB, a toyota press as opposed to a Ferrari

5
00:00:12,080 --> 00:00:14,640
Speaker 1: four to fifty eight. The aspechief economist Nick Toughley's with us. Nick,

6
00:00:14,720 --> 00:00:15,600
Speaker 1: very good morning to you.

7
00:00:16,200 --> 00:00:17,160
Speaker 2: Good morning now.

8
00:00:17,600 --> 00:00:20,400
Speaker 1: Q four zero point seven a little higher than we thought,

9
00:00:20,440 --> 00:00:22,640
Speaker 1: a little better than we thought in terms of GDP growth.

10
00:00:22,640 --> 00:00:24,159
Speaker 1: What do you think for Q one, which we're just

11
00:00:24,280 --> 00:00:24,880
Speaker 1: ending today.

12
00:00:26,079 --> 00:00:28,680
Speaker 2: Yeah, well, we think the payful of slode to bits

13
00:00:28,720 --> 00:00:31,520
Speaker 2: down to aboutzero point four percent over the quarters in

14
00:00:31,560 --> 00:00:33,479
Speaker 2: the first half of the year and then picked back up.

15
00:00:33,560 --> 00:00:35,760
Speaker 2: So some of what drove growth at the end of

16
00:00:35,880 --> 00:00:39,599
Speaker 2: last year is a little bit unsustainable. It's hartly been

17
00:00:39,640 --> 00:00:41,880
Speaker 2: because we had some very good dairying weather and that

18
00:00:42,000 --> 00:00:44,120
Speaker 2: helped the dairy production, and we had a pretty good

19
00:00:44,159 --> 00:00:46,200
Speaker 2: tourism season as well, which was very helpful.

20
00:00:46,440 --> 00:00:49,240
Speaker 1: How big is the primary sector and if it fell over,

21
00:00:49,360 --> 00:00:50,240
Speaker 1: would we fall over?

22
00:00:52,120 --> 00:00:55,560
Speaker 2: It's making a significant difference. But what we've also got

23
00:00:55,600 --> 00:00:58,600
Speaker 2: to remember is is not just primary we're seeing ongo

24
00:00:58,640 --> 00:01:01,640
Speaker 2: and recovery and tourism market, particularly the Chinese market, has

25
00:01:01,680 --> 00:01:04,840
Speaker 2: started to pick up now and increasingly this year. It's

26
00:01:04,880 --> 00:01:07,920
Speaker 2: the sort of slow consumer starting to get into life.

27
00:01:07,959 --> 00:01:10,959
Speaker 2: But if we hadn't had a really strong sort of

28
00:01:11,000 --> 00:01:13,959
Speaker 2: export performance late last year, we would have had some

29
00:01:14,000 --> 00:01:15,640
Speaker 2: pretty flat growth at the end of last year.

30
00:01:15,760 --> 00:01:18,280
Speaker 1: How confident are you in what we see in the

31
00:01:18,319 --> 00:01:20,080
Speaker 1: world at the moment, given that what we see in

32
00:01:20,080 --> 00:01:22,640
Speaker 1: the world may change tomorrow, if not by lunchtime.

33
00:01:24,480 --> 00:01:30,280
Speaker 2: Well, some of those things like the dairy meat, some

34
00:01:30,319 --> 00:01:32,560
Speaker 2: of that tourism we should see that continue to do

35
00:01:32,959 --> 00:01:37,160
Speaker 2: reasonably well. What's really going to depend for us is

36
00:01:37,200 --> 00:01:39,800
Speaker 2: just how widespread any tariffs are going to be. So

37
00:01:39,920 --> 00:01:43,120
Speaker 2: our colleagues at CBA did some good analysis and depending

38
00:01:43,160 --> 00:01:45,920
Speaker 2: on the scenarios that we see, if you just get

39
00:01:46,240 --> 00:01:49,640
Speaker 2: fairly selective tariffs, it could be for New Zealand just

40
00:01:49,720 --> 00:01:52,360
Speaker 2: one or two tenths percent off our GDP, But if

41
00:01:52,400 --> 00:01:55,520
Speaker 2: you had, say twenty percent tariff right across the board

42
00:01:55,560 --> 00:01:58,680
Speaker 2: on all US imports, and that could hit our GDP

43
00:01:58,880 --> 00:02:01,600
Speaker 2: by about three quarters. So it really does depend on

44
00:02:01,600 --> 00:02:05,280
Speaker 2: the details that come out. One thing I think for

45
00:02:05,440 --> 00:02:09,480
Speaker 2: us to bear in mind, we're pretty small, so we

46
00:02:09,520 --> 00:02:13,160
Speaker 2: may go under the radar, and some of our key exports,

47
00:02:13,200 --> 00:02:16,040
Speaker 2: things like meat, a lot of it goes into hamburgers,

48
00:02:16,160 --> 00:02:19,760
Speaker 2: and just the proportion of what goes into the final

49
00:02:19,800 --> 00:02:22,880
Speaker 2: consumer out of New Zealand. Hopefully the wouldn't be too

50
00:02:22,960 --> 00:02:25,200
Speaker 2: much of a price impact for them even if we

51
00:02:25,280 --> 00:02:26,720
Speaker 2: had things like meat tariff.

52
00:02:27,200 --> 00:02:29,760
Speaker 1: Does that depend on how people react, because I'm just

53
00:02:29,800 --> 00:02:32,720
Speaker 1: reading this morning the UK are trying desperately to carve

54
00:02:32,760 --> 00:02:35,560
Speaker 1: out some sort of exemption. Assuming they don't. The word

55
00:02:35,639 --> 00:02:38,320
Speaker 1: is from Downing Street. They're going to retaliate if the

56
00:02:38,320 --> 00:02:41,880
Speaker 1: whole world retaliates and America retaliates on the retaliation is

57
00:02:41,919 --> 00:02:42,360
Speaker 1: it all on?

58
00:02:43,919 --> 00:02:46,720
Speaker 2: That does mean that the impacts could be a lot

59
00:02:46,760 --> 00:02:49,280
Speaker 2: bigger if you go through and do that. So we'll

60
00:02:49,280 --> 00:02:51,640
Speaker 2: have to be thinking through here in New Zealand. How

61
00:02:51,680 --> 00:02:55,360
Speaker 2: will some of our actually trading partners slow down? For one,

62
00:02:55,960 --> 00:03:00,280
Speaker 2: what will happen with inflation globally? Also what benefits maybe

63
00:03:00,400 --> 00:03:04,840
Speaker 2: be because we may find given an example, if Canada's

64
00:03:04,840 --> 00:03:08,440
Speaker 2: struggling to sell maple syrup and bacon into the US

65
00:03:08,480 --> 00:03:12,160
Speaker 2: and China's struggling to sell evs, we may see a

66
00:03:12,200 --> 00:03:14,560
Speaker 2: lot of cheap product coming our way as well, so

67
00:03:14,800 --> 00:03:16,399
Speaker 2: all those things to throw into the mix.

68
00:03:16,639 --> 00:03:18,640
Speaker 1: Okay, and this is all predicated. I take it on

69
00:03:18,680 --> 00:03:20,840
Speaker 1: the RB moving in April and May and we're done.

70
00:03:22,120 --> 00:03:24,440
Speaker 2: That's what we expect. We'll get two more rate cats.

71
00:03:24,480 --> 00:03:26,680
Speaker 2: I think the thing is on the global front, if

72
00:03:26,840 --> 00:03:31,280
Speaker 2: things get stickier, you'll see there reserve being here, likely

73
00:03:31,400 --> 00:03:34,000
Speaker 2: CAT more. And the other thing also is is that

74
00:03:34,120 --> 00:03:37,080
Speaker 2: governments are likely if the impacts of tariff's likely to

75
00:03:37,120 --> 00:03:40,520
Speaker 2: be bigger, will also swing in and provide more support

76
00:03:40,520 --> 00:03:42,640
Speaker 2: to their economies as well. So we've got those factors.

77
00:03:42,640 --> 00:03:45,200
Speaker 1: The way up to and this pretty is be the

78
00:03:45,240 --> 00:03:46,240
Speaker 1: Ferrari four fifty eight.

79
00:03:46,280 --> 00:03:49,760
Speaker 2: To you a car guy, Yes, I have been known

80
00:03:49,800 --> 00:03:53,080
Speaker 2: to have the occasional occasional car. But look, productivities are

81
00:03:53,080 --> 00:03:55,400
Speaker 2: probably the big difference between those things. One's got certainly

82
00:03:55,400 --> 00:03:56,800
Speaker 2: got a lot more horsepower than the other.

83
00:03:56,920 --> 00:03:58,760
Speaker 1: Because the four P fifty eight is the one to have.

84
00:03:59,640 --> 00:04:01,240
Speaker 1: But you presumably know that, don't you.

85
00:04:01,880 --> 00:04:04,160
Speaker 2: Yes, good, good, B It's always good.

86
00:04:04,320 --> 00:04:06,040
Speaker 1: This is true. Nice to talk to you, Nick, appreciate.

87
00:04:06,040 --> 00:04:08,240
Speaker 1: I knew he knew about cars, Nick Tuffer. You don't

88
00:04:08,280 --> 00:04:10,520
Speaker 1: go Ferrari four fifty eight unless you know about cars.

89
00:04:10,520 --> 00:04:13,960
Speaker 1: ASB chief economists. For more from the my Casking Breakfast

90
00:04:14,160 --> 00:04:17,479
Speaker 1: listen live to news talks it'd be from six am weekdays,

91
00:04:17,720 --> 00:04:19,720
Speaker 1: or follow the podcast on iHeartRadio