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Speaker 1: Quarter forard GDP was er point two percent growth. That's good,

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Speaker 1: but lower than expected. And this was all pre war.

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Speaker 1: Of course, Matt guilt Is aims at senior economists. Mat

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Speaker 1: good morning, good morning. So we're still growing, so that's good.

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Speaker 2: Yeah, So it's good to see a small amount of growth.

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Speaker 2: And if you look across the wider set of indicators

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Speaker 2: across the second half of twenty twenty five, it did

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Speaker 2: look late. There was a modest recovery getting going. But

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Speaker 2: over all the data yesterday it was a bit disappointing

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Speaker 2: to not see more growth there, given there were some

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Speaker 2: pretty decent tail winds last year like lower interst rates

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Speaker 2: and high high prices for meat and dairy farmers.

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Speaker 1: Also where the growth coming from, Matt, Rental hiring, real

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Speaker 1: estate services the largest contributors. That does that sound like momentum.

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Speaker 2: Yeah, we didn't see a whole heap of momentum there.

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Speaker 2: There was a bit of growth in some service industries,

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Speaker 2: late rental hiring, in real estates in other areas, but

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Speaker 2: not a whole lot of growth. And a lot of

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Speaker 2: the more domestically oriented part of the economy, parts of

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Speaker 2: the economy like construction and manufacturing was disappointing as well. So, yeah,

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Speaker 2: a few parts of the economy growing, but it wasn't

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Speaker 2: really firing. How careful.

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Speaker 1: We've obviously now moved on to very quickly to what's

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Speaker 1: going on over in the Middle East. Scope to delay

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Speaker 1: ocr hikes, you know, given that this number was less

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Speaker 1: than what the Reserve Bank was picking half a percent, right,

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Speaker 1: we've got point two. Does that give them more scope

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Speaker 1: to delay hikes?

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Speaker 2: It does, we'd say yes. So the Reserve Bank, we

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Speaker 2: thought would already be reasonably cautious about this oil price

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Speaker 2: shot compared to a lot of other central banks overseas,

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Speaker 2: just given that the New zeal And economy is not

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Speaker 2: coming from an especially strong starting point. So definitely inflation

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Speaker 2: will rise with oil prices going up as much as

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Speaker 2: they have, But the real concern for the Reserve Bank

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Speaker 2: will be with that that's increase in oil prices spills

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Speaker 2: over into generalized inflation things like wages and other prices,

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Speaker 2: and with the economy in a relatively weak state, we

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Speaker 2: think they'll be less worried about that than places like Australia,

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Speaker 2: where the economy is firing more strongly.

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Speaker 1: Yeah, it's hotter than most parts of the country right now.

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Speaker 1: How careful does the government here need to be, Matt

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Speaker 1: about fiscal stimulus because it's so tempting and the Italians

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Speaker 1: overnight have gone for it, George, and Maloney has got

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Speaker 1: a constitutional referendum this weekend, so she's cutting fuel excise

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Speaker 1: because she's got political agendas. How careful do they need

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Speaker 1: to be with fiscal stimulus given the inflation projection and

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Speaker 1: possibility from the war.

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Speaker 2: There was certainly a lot learned from the COVID nineteen

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Speaker 2: pandemic about fiscal stimulus, where lots of countries around the

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Speaker 2: world really use fiscal stimulus stimulus heavily to respond to

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Speaker 2: the pandemic, and it did contribute to inflation around the world.

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Speaker 2: So the government's well, they are already showing signs are

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Speaker 2: being quite cautious about that. They're talking about the school

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Speaker 2: support being targeted and temporary and quite narrow, and that's

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Speaker 2: what you'd want to see when inflation is coming from

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Speaker 2: a not very comfortable starting point and going higher. So

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Speaker 2: it is sensible that they're being cautious not to push

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Speaker 2: inflation higher with their fiscal response.

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Speaker 1: Appreciate your time this morning, Matt. Matt goldain Zed Senior Economist.

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