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Speaker 1: Good afternoon. To the surprise of absolutely no one, the

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Speaker 1: economy has shrunk again. GDP was down zero point two

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Speaker 1: percent in the second quarter of the year. Retail trade, accommodation, agriculture, forestry, fishery, fishing,

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Speaker 1: and wholesale trade industries all foul. Jared ker is Kiwibank's

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Speaker 1: chief economist, and with us Now, hey, Jared, Hi, Matte,

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Speaker 1: it's good to talk to you again. You reckon this

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Speaker 1: basically is getting us very close to, if not already

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Speaker 1: at two years of recession.

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Speaker 2: Yeah, yeah, it is. We think we'll see another contraction

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Speaker 2: in the current quarter, so that'll bring it on two years.

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Speaker 1: I mean, the thing that's the number that hurts the

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Speaker 1: most is the per capita GDP fall of two point

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Speaker 1: seven percent.

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Speaker 3: How significant is that?

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Speaker 2: It is very significant. We have seen quite a spike

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Speaker 2: in migration over the twenty twenty three but when we

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Speaker 2: chop it up and look on a per capita basis,

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Speaker 2: we saw a four point five in the quarter, and

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Speaker 2: we're down four point six from twenty twenty two levels.

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Speaker 2: That's significant, and that's where what we saw during the GFC.

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Speaker 3: When does this turn around, When do we start seeing

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Speaker 3: per capita growth again.

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Speaker 2: Late next year, I think. But I think the Reserve

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Speaker 2: banks put a stake in the ground by sort of

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Speaker 2: cutting in August, and I think that'll mark the turning point.

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Speaker 2: Discussions with businesses in households since then has seen, you know,

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Speaker 2: people lift their heads and look to next year with

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Speaker 2: a bit more optimism.

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Speaker 3: What do you reckon the Reserve Bank does next month?

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Speaker 2: I think they cut twenty five. I think they should

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Speaker 2: cut fifty. We saw the SED come out this morning

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Speaker 2: with a fifty for basis point rate cut. They're clearly

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Speaker 2: willing to cut a little faster than we are, and

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Speaker 2: I think we need to do the same. You know,

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Speaker 2: we can't forget that interstrate cuts today take up to

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Speaker 2: eighteen months to feed through, so you're setting policy for

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Speaker 2: the start of twenty twenty six. I think they need

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Speaker 2: to get cracking good stuff.

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Speaker 3: Jered really appreciated Jared Kirkiey Banks to Economist.

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