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Speaker 1: Brad Olsen, the Prime Minister, was grilled about his poor

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Speaker 1: poll numbers on his morning media around this morning, and

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Speaker 1: he kept quoting one economist when promising that things will

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Speaker 1: get better. You know, it is some green sheets.

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Speaker 2: I mean I saw, you know, brad Olsen saying by

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Speaker 2: the end of the by the end of the year

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Speaker 2: that we forty five million dollars extra week in Kiwis

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Speaker 2: pockets to spend in the economy. That's all good stuff

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Speaker 2: as interest rates come down.

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Speaker 1: Brad Olsen is of course Informetrics principal economisties with us

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Speaker 1: this evening high Brad, good evening. So in reference to

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Speaker 1: the Prime Minister's comments, when will we be feeling better,

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Speaker 1: how will we be feeling about the economy by the

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Speaker 1: end of the year. Yeah, I mean we do expect.

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Speaker 2: Things to continually get better. Of course, those interest rates

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Speaker 2: are coming down, but it takes a bit of time

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Speaker 2: for everyone to refix on to them. And at the

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Speaker 2: same time, you know, data out recently showed that the

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Speaker 2: unemployment rate has been going up. So I do think

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Speaker 2: we're in that odd period and very challenging period still

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Speaker 2: where there's a lot of hurts and a lot of

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Speaker 2: economic challenge around, but there are those greeners shoots showing through.

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Speaker 2: The Prime Minister referenced one of the numbers that we've

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Speaker 2: recently quoted when we looked at our latest economic forecast,

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Speaker 2: which is that by the end of this year, we

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Speaker 2: expect around forty five million dollars a week more to

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Speaker 2: be available for households to spend out in the economy

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Speaker 2: that previously they had to put on those much higher

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Speaker 2: mortgage rates. So that's certainly helping, and you're starting to

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Speaker 2: see that in some areas across business, you're starting to

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Speaker 2: see the likes of job ads that have plateaued out

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Speaker 2: and similar but in reference I mean you mentioned Ryan

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Speaker 2: that some of those pole results, it was interesting some

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Speaker 2: of them last night showing the likes of households economic

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Speaker 2: outlook as well. Households are saying that you know, there's

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Speaker 2: still nearly a quarter that are saying they expect things

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Speaker 2: to be worse in a year's time, and given the

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Speaker 2: interest rates are coming down, that's of course quite concerning.

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Speaker 2: So it shows that the economic recovery is not going

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Speaker 2: to be balanced across everyone. There are some definite differences

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Speaker 2: across but we are a lot more confident and that

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Speaker 2: comes after some pretty difficult economic time.

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Speaker 1: Yeah, the RBNS dead, We're everyone sort of expecting a

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Speaker 1: half a percent when they go to meet next week.

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Speaker 1: But after that, do you expect that they will signal

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Speaker 1: or maybe even during the meeting will signal that they

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Speaker 1: will go further before November even you know, perhaps even

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Speaker 1: further than what we predict.

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Speaker 2: Well, in a sense, we're actually wondering at infometrics the opposite.

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Speaker 2: And this has been a slightly more controversial view than

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Speaker 2: we thought it would be when we started talking about it,

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Speaker 2: But we wonder looking at some of the pressures out

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Speaker 2: there in the economy. You look at the likes of

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Speaker 2: important inflation fears, the fact that the New Zealand dollar

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Speaker 2: is down quite a bit against the US over the

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Speaker 2: last couple of months, the fact that in the latest

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Speaker 2: A and Z Business Outlook survey there were a higher

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Speaker 2: proportion of businesses saying they expect to get higher cost

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Speaker 2: increases in the next couple of months. None of that's

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Speaker 2: sort of good for longer term inflationary trends. So we

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Speaker 2: actually wonder if, yep, the Reserve Bank goes by fifty

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Speaker 2: in February, but they might well signal that there's not

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Speaker 2: quite as many cuts left in the town after that. End.

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Speaker 2: Of course, we've seen retail banks the last couple of

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Speaker 2: weeks cutting their interest rates back quite a bit, and

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Speaker 2: so it wouldn't surprise us if you saw the Reserve

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Speaker 2: Bank cut the official cash rate, but maybe not quite

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Speaker 2: as many cuts to retail rates because the banks have

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Speaker 2: already priced some of them in. Now, that's not to

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Speaker 2: say that the economy won't continue to get better, but

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Speaker 2: there is just that open question of sort of, you know,

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Speaker 2: are we where are we trying to get to. Are

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Speaker 2: we trying to get back to sort of a more

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Speaker 2: normal level of growth, sort of not stellar, or are

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Speaker 2: we able to supercharge it ahead. At the moment, we're

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Speaker 2: still worried that, you know, we get growth back to

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Speaker 2: just sort of plodding along. And I think everyone's quite

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Speaker 2: clear they'd like to see more than that.

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Speaker 1: What's your take on what is good news from Westpac

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Speaker 1: today predicting that those dairy prices will stay above ten

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Speaker 1: dollars this year. What's your take on that?

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Speaker 2: Oh, look very encouraging and I think you know, we've

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Speaker 2: been expecting for a couple of months now that a

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Speaker 2: lot of the economic recovery that we're starting to come through. Yep,

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Speaker 2: it'll be driven by households, but at the same time,

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Speaker 2: those rural and provincial parts of New Zealand really are

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Speaker 2: starting to get a little bit more momentum showing through.

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Speaker 2: I've spent the last couple of days traveling around parts

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Speaker 2: of South Island, through the West Coast and Canterbury, and

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Speaker 2: there's certainly been a little bit more activity than I

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Speaker 2: feel like I saw towards the end of last year,

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Speaker 2: certainly the middle of twenty twenty four, and that just

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Speaker 2: suggests it's a little bit more confident starting to come through.

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Speaker 2: The difficulty is, you know, we're not seeing the economy

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Speaker 2: absolutely rip roaring, like no one's saying that, but equally

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Speaker 2: we're not in the same doldrums. I think that we

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Speaker 2: were going back a year ago and trying to find

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Speaker 2: that new economic goldilock zone is going to be important,

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Speaker 2: and I think we're starting to get a little bit

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Speaker 2: more clarity on where that might be. It's better, but

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Speaker 2: it's not fantastic and just hell raising all of a sudden,

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Speaker 2: all that quickly.

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Speaker 1: Brad, thank you very much for that. Brad Olson Informentiate

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Speaker 1: Principal economist off quoted by the Prime Minister. For more

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Speaker 1: from Heather Duplessy Allen Drive Listen live to news talks.

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