1 00:00:00,280 --> 00:00:03,800 Speaker 1: Bryan Bridge time how to catch up with rockstar economist 2 00:00:04,000 --> 00:00:08,160 Speaker 1: HSBC's Paul Bloxham. The Australian Financial Review has just named 3 00:00:08,200 --> 00:00:12,160 Speaker 1: him the best economic forecaster in Australia for calling every 4 00:00:12,200 --> 00:00:15,720 Speaker 1: decision by the RBA correctly last year. They didn't charge 5 00:00:15,760 --> 00:00:19,239 Speaker 1: the change the ocr the entire year, so basically had 6 00:00:19,280 --> 00:00:22,800 Speaker 1: one answer the whole time, Paul Good, evening Good, I 7 00:00:23,440 --> 00:00:26,120 Speaker 1: how much did you pay the Australian Financial Review? 8 00:00:27,960 --> 00:00:31,000 Speaker 2: No, it doesn't work that way that way, but it's 9 00:00:31,280 --> 00:00:33,519 Speaker 2: a very very nice bit of recognition that we're very 10 00:00:33,520 --> 00:00:36,599 Speaker 2: appreciative of. As you say, we had the view all 11 00:00:36,600 --> 00:00:38,640 Speaker 2: through last year that the RBA wasn't going to be 12 00:00:38,680 --> 00:00:40,919 Speaker 2: able to cut interest rates, and I think we got 13 00:00:40,920 --> 00:00:42,800 Speaker 2: there for the right reason. We talked a lot about 14 00:00:42,800 --> 00:00:45,360 Speaker 2: the fact that productivity was weak and that the supply 15 00:00:45,440 --> 00:00:48,000 Speaker 2: side of the economy was still constrained, and that that 16 00:00:48,120 --> 00:00:50,080 Speaker 2: was the primary reason they just won't good to get there. 17 00:00:50,120 --> 00:00:52,760 Speaker 2: So so it's nice for that for that to have 18 00:00:52,760 --> 00:00:53,519 Speaker 2: turned out to be right. 19 00:00:54,480 --> 00:00:57,240 Speaker 1: Yet you are expecting a cut this month. 20 00:00:57,840 --> 00:01:00,360 Speaker 2: That's right, we do. We think the RB is going 21 00:01:00,400 --> 00:01:02,600 Speaker 2: to be able to cut interest rates this year, and 22 00:01:02,800 --> 00:01:05,399 Speaker 2: that view again we've had that for a while. We 23 00:01:05,440 --> 00:01:08,080 Speaker 2: now think it's likely to be at their meeting that 24 00:01:08,160 --> 00:01:09,959 Speaker 2: comes up in a couple of weeks times, so the 25 00:01:09,959 --> 00:01:13,320 Speaker 2: February meeting. And you know, part of the story there 26 00:01:13,440 --> 00:01:17,160 Speaker 2: is that inflation has gradually headed towards the RBA's target. 27 00:01:17,160 --> 00:01:19,920 Speaker 2: It's moving a little bit faster towards their target than 28 00:01:19,959 --> 00:01:24,000 Speaker 2: they had anticipated late last year. And in addition to that, 29 00:01:24,000 --> 00:01:26,280 Speaker 2: we've got global risks as well that we you know, 30 00:01:26,319 --> 00:01:28,280 Speaker 2: we can see playing out every day at the moment 31 00:01:28,280 --> 00:01:31,319 Speaker 2: in terms of the global trade developments and US policy 32 00:01:31,319 --> 00:01:33,080 Speaker 2: developments and so on. So we think that's going to 33 00:01:33,080 --> 00:01:35,240 Speaker 2: factor in a little bit as well. And all in all, 34 00:01:35,280 --> 00:01:36,640 Speaker 2: we think the RBA is going to be able to 35 00:01:36,680 --> 00:01:39,880 Speaker 2: start to be able to lower its policy rate deliver 36 00:01:40,000 --> 00:01:41,840 Speaker 2: a bit of support for the economy. 37 00:01:42,080 --> 00:01:46,560 Speaker 1: How is Australia going to be impacted by the Trump Well, 38 00:01:46,600 --> 00:01:49,120 Speaker 1: I mean, we say Trump's terrorists, but he's put them 39 00:01:49,160 --> 00:01:50,920 Speaker 1: on and then he's taken them off already within the 40 00:01:50,920 --> 00:01:53,440 Speaker 1: space of twenty four hours, and they're at the negotiating table. 41 00:01:53,840 --> 00:01:56,800 Speaker 1: So as best you can crystal ballgay is about what 42 00:01:56,840 --> 00:01:57,680 Speaker 1: impact it could have. 43 00:01:58,680 --> 00:02:00,480 Speaker 2: Well, I think the first thing we know is that 44 00:02:01,040 --> 00:02:03,360 Speaker 2: it's creating uncertainty. I mean, that's quite clear from just 45 00:02:03,400 --> 00:02:07,200 Speaker 2: the way you described it, and that uncertainty makes it 46 00:02:07,240 --> 00:02:09,280 Speaker 2: you know, means that I think overall it is it 47 00:02:09,360 --> 00:02:13,880 Speaker 2: is a downside risk for global growth because uncertainty means 48 00:02:13,880 --> 00:02:16,040 Speaker 2: that it's more difficult to make investment decisions, it's more 49 00:02:16,080 --> 00:02:19,880 Speaker 2: difficult to make decisions in general. And I think this 50 00:02:20,040 --> 00:02:23,639 Speaker 2: story has got further to play out, So I think 51 00:02:23,680 --> 00:02:26,560 Speaker 2: that possible downside risk to global growth is something we 52 00:02:26,600 --> 00:02:29,240 Speaker 2: need to factor in terms of thinking about what's going on. 53 00:02:29,560 --> 00:02:32,639 Speaker 2: That said, you know, what happens in terms of US 54 00:02:32,680 --> 00:02:35,560 Speaker 2: policy is not the primary driver in terms of its 55 00:02:35,639 --> 00:02:37,519 Speaker 2: US effect on the effect on the US economy on 56 00:02:37,560 --> 00:02:40,959 Speaker 2: Australia or New Zealand. That the primary question is what 57 00:02:41,320 --> 00:02:44,240 Speaker 2: the policy changes that affect China and then how does 58 00:02:44,720 --> 00:02:47,760 Speaker 2: do Chinese policy makers respond? And that's something we're also 59 00:02:47,880 --> 00:02:50,440 Speaker 2: watching play out at the moment, and we'll just have 60 00:02:50,480 --> 00:02:52,720 Speaker 2: to see how that plays, because that's the most important 61 00:02:52,720 --> 00:02:55,560 Speaker 2: feature factor in terms of driving what happens in Australia 62 00:02:55,560 --> 00:02:57,560 Speaker 2: and New Zealand. They are you know, Asia is our 63 00:02:57,560 --> 00:02:58,799 Speaker 2: major instead of trading partners. 64 00:02:58,960 --> 00:03:01,960 Speaker 1: They're true, and so father've just been making noises about 65 00:03:02,000 --> 00:03:05,679 Speaker 1: going to the wto that kind of thing. But yeah, 66 00:03:05,880 --> 00:03:07,840 Speaker 1: it has the potential to get quite gnarally. 67 00:03:09,400 --> 00:03:11,200 Speaker 2: I think it's going to be very a very interesting 68 00:03:11,240 --> 00:03:13,440 Speaker 2: time to watch what's going on, and it's going to 69 00:03:13,440 --> 00:03:16,840 Speaker 2: be difficult to navigate how in terms of in terms 70 00:03:16,840 --> 00:03:21,640 Speaker 2: of how you think about these various developments. But you know, nonetheless, 71 00:03:21,639 --> 00:03:23,920 Speaker 2: I think I think, obviously it's what's happening, so we 72 00:03:23,960 --> 00:03:25,720 Speaker 2: need to keep that in mind. And I think, as 73 00:03:25,720 --> 00:03:27,359 Speaker 2: I say, we need to watch out for what happens 74 00:03:27,360 --> 00:03:29,359 Speaker 2: in terms of policy developments, not just in the US 75 00:03:29,480 --> 00:03:33,920 Speaker 2: of course, but what the retaliation is from other countries 76 00:03:33,919 --> 00:03:35,280 Speaker 2: and particularly in Asia. 77 00:03:35,400 --> 00:03:37,119 Speaker 1: Nice one, Paul, thank you very much for that. Enjoy 78 00:03:37,160 --> 00:03:38,960 Speaker 1: the award. Did you get a trophy or something for 79 00:03:39,000 --> 00:03:40,440 Speaker 1: that or just a nod in the paper? 80 00:03:41,320 --> 00:03:44,600 Speaker 2: Just a nod in the paper, that's enough, Thanks Paul. 81 00:03:44,640 --> 00:03:47,320 Speaker 1: Thanks for that, Paul Blocks and with HSBC now the 82 00:03:47,360 --> 00:03:50,000 Speaker 1: reason we call them the rock star economists. You'll probably 83 00:03:50,040 --> 00:03:52,480 Speaker 1: know this, but back in the day when John Key 84 00:03:52,600 --> 00:03:55,000 Speaker 1: was in power, he declared that we had the rock 85 00:03:55,040 --> 00:03:58,840 Speaker 1: star economy of the world and has since done many 86 00:03:58,880 --> 00:04:00,520 Speaker 1: many interviews and every time you can speck for an 87 00:04:00,560 --> 00:04:02,080 Speaker 1: interview the poor guy. We used to do it on 88 00:04:02,160 --> 00:04:04,240 Speaker 1: Telly as well. So what is it? What's your new 89 00:04:04,320 --> 00:04:06,400 Speaker 1: label for our economy? And he'd have to come up 90 00:04:06,400 --> 00:04:09,680 Speaker 1: with some stupid name, just just to try and compete 91 00:04:09,720 --> 00:04:12,360 Speaker 1: with the first one he gave. By the way, they've 92 00:04:12,400 --> 00:04:15,280 Speaker 1: never been as good since, have they? For more from 93 00:04:15,320 --> 00:04:18,640 Speaker 1: Hither Duplessy Allen Drive, listen live to news talks. It'd 94 00:04:18,640 --> 00:04:22,720 Speaker 1: be from four pm weekdays, or follow the podcast on iHeartRadio.