1 00:00:00,080 --> 00:00:04,600 Speaker 1: From seven in there. Right back to the economic situation 2 00:00:04,680 --> 00:00:06,560 Speaker 1: in which we face is currently in this country. New 3 00:00:06,600 --> 00:00:08,680 Speaker 1: forecast for our economy as we wait for the Q 4 00:00:08,720 --> 00:00:11,840 Speaker 1: one figure on Thursday. Of course, NZIAR have revised their 5 00:00:11,880 --> 00:00:14,800 Speaker 1: annual GDP stats for the year's ending March twenty four 6 00:00:14,800 --> 00:00:17,800 Speaker 1: and March twenty five. They're down to zero point two 7 00:00:17,800 --> 00:00:21,639 Speaker 1: percent and zero point six percent, respectively. Deputy Chief Executive 8 00:00:21,680 --> 00:00:24,720 Speaker 1: from the NZI, Christina Leung, is well us, Christina, very 9 00:00:24,720 --> 00:00:28,120 Speaker 1: good morning to you. Whatever what have you gotten? Q one, 10 00:00:28,160 --> 00:00:30,000 Speaker 1: by the way, for Thursday are going backwards. 11 00:00:29,760 --> 00:00:33,080 Speaker 2: Or forwards, So we are actually forecasting a flat result 12 00:00:33,240 --> 00:00:36,280 Speaker 2: for the March quarter of this year. Now that reflects 13 00:00:36,440 --> 00:00:40,760 Speaker 2: actively indicators which suggests weakness and construction and profit personal 14 00:00:40,880 --> 00:00:44,440 Speaker 2: services overall, we wouldn't be surprised if lad ere a 15 00:00:44,479 --> 00:00:48,640 Speaker 2: small negative or a positive, and that's generally a weak 16 00:00:48,680 --> 00:00:50,080 Speaker 2: result for the news and economy. 17 00:00:50,159 --> 00:00:51,839 Speaker 1: Okay, So if Q one is flat, then Q two 18 00:00:51,920 --> 00:00:53,120 Speaker 1: will be flat air, won't it? 19 00:00:54,440 --> 00:00:57,720 Speaker 2: Overall? In terms of the outlook ahead, we're expecting week's 20 00:00:57,720 --> 00:01:01,160 Speaker 2: growth for the coming year. Now. That reflects combination of factors, 21 00:01:01,440 --> 00:01:03,680 Speaker 2: the fact that we've got higher interest rates, the impact 22 00:01:03,760 --> 00:01:07,119 Speaker 2: of that is becoming more apparent in terms of dampening demand. Now, 23 00:01:07,120 --> 00:01:10,720 Speaker 2: it's important to remember that that's intended by the Reserve 24 00:01:10,760 --> 00:01:14,480 Speaker 2: Bank when it first increased the ocr back in October 25 00:01:14,560 --> 00:01:17,680 Speaker 2: twenty twenty one. It needed to reduce demand in order 26 00:01:17,720 --> 00:01:19,600 Speaker 2: to take the heat out of the news and economy 27 00:01:19,760 --> 00:01:22,319 Speaker 2: so that it can bring annual inflation back towards its 28 00:01:22,319 --> 00:01:25,240 Speaker 2: one to three percent inflation target band. But on top 29 00:01:25,280 --> 00:01:28,080 Speaker 2: of that, what we're also seeing is that heightened uncertainty 30 00:01:28,319 --> 00:01:30,959 Speaker 2: regarding the new government's priorities when it comes to spending 31 00:01:31,000 --> 00:01:33,400 Speaker 2: and also cut back from the public sector. So what 32 00:01:33,400 --> 00:01:35,959 Speaker 2: we're seeing is that households and businesses are becoming much 33 00:01:36,000 --> 00:01:38,520 Speaker 2: more cautious when it comes to spending and investments. 34 00:01:38,680 --> 00:01:40,720 Speaker 1: That is true when you go out to March twenty 35 00:01:40,720 --> 00:01:43,039 Speaker 1: five and you found zero point six percent. Where is 36 00:01:43,080 --> 00:01:45,480 Speaker 1: the growth? Where's it coming at? Is it Q three 37 00:01:45,520 --> 00:01:45,960 Speaker 1: Q four? 38 00:01:47,120 --> 00:01:51,320 Speaker 2: So yes. So firstly, the latest NJEDAAR consensus is actually 39 00:01:51,520 --> 00:01:55,400 Speaker 2: captures the forecast of eight organizations which produce forecasts for 40 00:01:55,440 --> 00:01:59,200 Speaker 2: the New Zone economy. That said, the outlook the average 41 00:01:59,240 --> 00:02:01,400 Speaker 2: of those forecasts broadly in line with where we have 42 00:02:01,800 --> 00:02:04,800 Speaker 2: our expectations for the News and economy. In terms of 43 00:02:04,840 --> 00:02:07,720 Speaker 2: where this growth is coming from. We are seeing shroll 44 00:02:07,840 --> 00:02:11,480 Speaker 2: migration leap population growth, so on an aggregate level, it 45 00:02:11,520 --> 00:02:15,560 Speaker 2: is still expected to support demand across a range of areas, 46 00:02:15,600 --> 00:02:18,280 Speaker 2: particularly when it comes to construction. Certainly, when we look 47 00:02:18,280 --> 00:02:20,440 Speaker 2: at the new tom outlook for construction, if we look 48 00:02:20,440 --> 00:02:23,760 Speaker 2: at things like dwelling consent issuance and the ended a 49 00:02:23,840 --> 00:02:27,720 Speaker 2: core lesser business opinion architect's measure of our pipeline when 50 00:02:27,720 --> 00:02:31,880 Speaker 2: it comes to construction activity across residential, commercial and government work, 51 00:02:31,919 --> 00:02:34,440 Speaker 2: that still looks pretty weak for the coming year. But 52 00:02:34,680 --> 00:02:37,880 Speaker 2: we do expect that beyond the coming year, from next 53 00:02:37,960 --> 00:02:41,160 Speaker 2: year onwards, that aggregate growth that will start to pick 54 00:02:41,200 --> 00:02:43,400 Speaker 2: up given the shroal migration leat population. 55 00:02:43,480 --> 00:02:46,000 Speaker 1: So you're broadly of that argument hang on in twenty 56 00:02:46,000 --> 00:02:48,960 Speaker 1: four and something arrives a bit better in twenty five. 57 00:02:49,200 --> 00:02:54,200 Speaker 2: Broadly, yes, that is our expectation and also appears the 58 00:02:54,240 --> 00:02:59,000 Speaker 2: expectation of our ended a consensus panel of eight organizations, 59 00:02:59,200 --> 00:03:03,079 Speaker 2: and that reflects also the expectations that from next year 60 00:03:03,360 --> 00:03:06,200 Speaker 2: we will start to get interesstrate decreases. Now, as I 61 00:03:06,320 --> 00:03:08,600 Speaker 2: was saying, we are what we're seeing at the moment 62 00:03:08,639 --> 00:03:11,600 Speaker 2: partly is a result of high interest rates stampening demand 63 00:03:11,880 --> 00:03:15,240 Speaker 2: so that inflation can reduce back to its one to 64 00:03:15,280 --> 00:03:19,080 Speaker 2: three percent inflation target ban. But once that happens and 65 00:03:19,120 --> 00:03:22,560 Speaker 2: the Reserve Bank is confident enough that the inflation is 66 00:03:22,600 --> 00:03:25,840 Speaker 2: anchored back towards the inflation target band, we will start 67 00:03:25,840 --> 00:03:30,000 Speaker 2: to see interst rate cuts and that should start to 68 00:03:30,040 --> 00:03:33,760 Speaker 2: support demand across a range of sectors over the coming years. 69 00:03:33,880 --> 00:03:36,560 Speaker 1: I hope you are right, Christina. Christina Jung, who's the 70 00:03:36,600 --> 00:03:39,600 Speaker 1: deputy chief executive at the ends that I might for 71 00:03:39,680 --> 00:03:42,760 Speaker 1: more from the mic Asking Breakfast, Listen live to news 72 00:03:42,800 --> 00:03:45,720 Speaker 1: talks that'd be from six am weekdays, or follow the 73 00:03:45,760 --> 00:03:47,200 Speaker 1: podcast on iHeartRadio.