1 00:00:00,160 --> 00:00:02,080 Speaker 1: We're going to get our official inflation number for the 2 00:00:02,160 --> 00:00:05,480 Speaker 1: year twenty twenty five, and economists are picking three percent 3 00:00:05,640 --> 00:00:09,840 Speaker 1: or above, which would come in above the Reserve Bank's 4 00:00:09,880 --> 00:00:13,160 Speaker 1: forecast of two point seven percent. So independent economists. Cameron 5 00:00:13,720 --> 00:00:16,599 Speaker 1: Bagary joins and now go going to you, Cameron, My 6 00:00:16,720 --> 00:00:18,040 Speaker 1: good morning. What's your pick? 7 00:00:19,720 --> 00:00:22,040 Speaker 2: I think we obviously a number round point five one 8 00:00:22,079 --> 00:00:25,239 Speaker 2: percent point five percent are in the quarter percent for 9 00:00:25,360 --> 00:00:28,479 Speaker 2: the year on year, the Reserve Bank expecting number a 10 00:00:28,480 --> 00:00:31,040 Speaker 2: little lower. And when numbers tend to come a little 11 00:00:31,040 --> 00:00:32,839 Speaker 2: bit higher on what the reserve banks expecting on the 12 00:00:32,840 --> 00:00:35,879 Speaker 2: inflation front, markets tend to pull back from the expectations. 13 00:00:35,880 --> 00:00:38,840 Speaker 2: So the sea moving down, and think markets now starting 14 00:00:38,840 --> 00:00:40,720 Speaker 2: the stink the sea is going to be moving up 15 00:00:40,720 --> 00:00:42,480 Speaker 2: in two thousand and twenty six. 16 00:00:43,240 --> 00:00:45,120 Speaker 1: Did you say you think it will be moving up? 17 00:00:46,520 --> 00:00:49,120 Speaker 2: Well, that's what markets participate at the moment. That's allsom 18 00:00:49,159 --> 00:00:52,559 Speaker 2: my own sort of personal view. Inflation is looking to 19 00:00:52,560 --> 00:00:54,360 Speaker 2: be a little bit sort of sticky towards the top 20 00:00:54,480 --> 00:00:56,960 Speaker 2: end of the targets. The target sign is one to 21 00:00:57,000 --> 00:00:59,480 Speaker 2: three percent. We got down to two point two. We've 22 00:00:59,520 --> 00:01:01,680 Speaker 2: bounced back up the pre You've got an economy that's 23 00:01:01,720 --> 00:01:05,560 Speaker 2: turned in the corner that suggests that the disinflationary pressure 24 00:01:05,600 --> 00:01:07,800 Speaker 2: to take it back down to two percent is not 25 00:01:08,000 --> 00:01:10,440 Speaker 2: quite going to be there. So it looked like the 26 00:01:10,480 --> 00:01:13,199 Speaker 2: OCR this stage is probably a little bit too low 27 00:01:13,840 --> 00:01:16,840 Speaker 2: for where the economy is and where inflatave re pressures 28 00:01:16,959 --> 00:01:20,040 Speaker 2: are so extect the OCR at some stage and then 29 00:01:20,040 --> 00:01:22,040 Speaker 2: ex sort of twelve months to go a little bit higher, 30 00:01:22,240 --> 00:01:24,360 Speaker 2: emphasis on a little bit higher, not a lot higher. 31 00:01:24,840 --> 00:01:27,240 Speaker 1: Now the big pressure is from things that are non tradable, 32 00:01:27,280 --> 00:01:30,400 Speaker 1: you know, things like electricity and rates and stuff like that. 33 00:01:30,400 --> 00:01:32,920 Speaker 1: That that's always distorting everything, isn't it. 34 00:01:34,720 --> 00:01:37,800 Speaker 2: It is in terms of the year and year the numbers. Yeah, 35 00:01:38,360 --> 00:01:39,640 Speaker 2: if you go back and you have a look at 36 00:01:39,680 --> 00:01:44,319 Speaker 2: inflation repressure for most of the two thousand sort of error, 37 00:01:44,840 --> 00:01:49,320 Speaker 2: we managed to keep inflation pretty low to low two percent, 38 00:01:49,520 --> 00:01:51,840 Speaker 2: and a lot of that was because of the low 39 00:01:51,960 --> 00:01:57,520 Speaker 2: non low platable inflation, imported goods, cheap stuff out of China. 40 00:01:58,080 --> 00:01:59,920 Speaker 2: If you look at where we are at the moment, 41 00:02:01,280 --> 00:02:03,720 Speaker 2: obviously we've got the impact of the lower U see 42 00:02:03,720 --> 00:02:06,760 Speaker 2: on DOTAR, which tends to push up imput prices. Your 43 00:02:06,800 --> 00:02:09,880 Speaker 2: export prices were obviously pretty good for the farmers. Not 44 00:02:10,040 --> 00:02:12,440 Speaker 2: so good for people that are buying red meat at 45 00:02:12,440 --> 00:02:15,320 Speaker 2: the supermarket. And what we're also seeing there is you 46 00:02:15,400 --> 00:02:19,000 Speaker 2: administrative charges from central and love of government. They're running 47 00:02:19,000 --> 00:02:22,960 Speaker 2: pretty hot. You've got rates that are running pretty hot. 48 00:02:23,120 --> 00:02:26,359 Speaker 2: You've got alectricity gas prices that are running pretty hot 49 00:02:26,440 --> 00:02:30,000 Speaker 2: as well. So you've got a certain persistence stickiness to 50 00:02:30,200 --> 00:02:32,680 Speaker 2: non trade of inflation or parts of non trade of inflation. 51 00:02:32,960 --> 00:02:36,480 Speaker 2: But your strip goes out in non trading inflation. Your 52 00:02:36,480 --> 00:02:38,480 Speaker 2: house and prists, your rents, you know, those sort of 53 00:02:38,480 --> 00:02:41,760 Speaker 2: things are pretty soft wide because the economy has been 54 00:02:41,800 --> 00:02:44,600 Speaker 2: pretty weak. When the economy has been pretty weak, firms 55 00:02:44,600 --> 00:02:47,000 Speaker 2: can't tend to pass on pricing places. It's a real 56 00:02:47,080 --> 00:02:49,079 Speaker 2: too dead story out there in regard to what we're 57 00:02:49,080 --> 00:02:50,160 Speaker 2: seeing in regard to inflation. 58 00:02:50,639 --> 00:02:52,960 Speaker 1: Meanwhile, the election is coming up. We've got three hundred 59 00:02:53,040 --> 00:02:54,920 Speaker 1: days before we head to the polls once again, and 60 00:02:54,960 --> 00:02:57,079 Speaker 1: obviously the economy is going to be front and center 61 00:02:57,120 --> 00:02:59,480 Speaker 1: in terms of all the parties and what they debate. 62 00:02:59,560 --> 00:03:01,720 Speaker 1: So what do you think is going to happen over 63 00:03:01,760 --> 00:03:03,760 Speaker 1: the year and which party will be in the best 64 00:03:03,800 --> 00:03:08,040 Speaker 1: position to, you know, to take advantage of it. 65 00:03:09,040 --> 00:03:10,680 Speaker 2: Well, it depends what you look at. If you look 66 00:03:10,720 --> 00:03:13,200 Speaker 2: at traditionally, a stronger economy tends to be good for 67 00:03:13,200 --> 00:03:15,600 Speaker 2: the incumbents, and obviously the economy if you look at 68 00:03:16,000 --> 00:03:19,080 Speaker 2: just about the audo economic indicators is your wee can pencil, 69 00:03:19,160 --> 00:03:20,760 Speaker 2: and the twenty twenty six is going to be a 70 00:03:20,760 --> 00:03:23,079 Speaker 2: head of a lot better than twenty twenty five. I 71 00:03:23,080 --> 00:03:24,480 Speaker 2: don't think the cloney is going to be knocking the 72 00:03:24,520 --> 00:03:26,680 Speaker 2: ball out of the part but we've certainly got fourth 73 00:03:26,760 --> 00:03:29,519 Speaker 2: pulsion and motor in part Land. We're probably going to 74 00:03:29,560 --> 00:03:32,280 Speaker 2: be running along the motorway about third year, but we'd 75 00:03:32,320 --> 00:03:33,639 Speaker 2: like to be in fourth or fifth, and I don't 76 00:03:33,639 --> 00:03:35,000 Speaker 2: think we got quite going to be the year, but 77 00:03:35,600 --> 00:03:37,640 Speaker 2: third year is an awful lot better than reverse which 78 00:03:37,640 --> 00:03:40,200 Speaker 2: would be so that's good for the incumbents of the 79 00:03:40,280 --> 00:03:41,960 Speaker 2: sticking fort the incumbents. I think it is going to 80 00:03:41,960 --> 00:03:45,280 Speaker 2: be inflation number one issue out there across you see 81 00:03:45,320 --> 00:03:48,520 Speaker 2: on at the moment. It's cost all of them, and 82 00:03:48,800 --> 00:03:51,360 Speaker 2: inflation so opens money out of people's pockets. And I 83 00:03:51,360 --> 00:03:53,280 Speaker 2: think inflation is going to end up settling in the 84 00:03:53,280 --> 00:03:55,200 Speaker 2: two and a half to three percent of his own 85 00:03:55,560 --> 00:03:57,240 Speaker 2: in places setters and the two and a half three 86 00:03:57,240 --> 00:03:59,160 Speaker 2: percent of his own I think that's going to be 87 00:03:59,200 --> 00:04:02,560 Speaker 2: a problem for the incumbent governments. There's a glass up 88 00:04:02,640 --> 00:04:04,520 Speaker 2: fall and there's a glass op eaty story in regard 89 00:04:04,560 --> 00:04:06,360 Speaker 2: to what the economic immigrat is going to be telling both. 90 00:04:06,480 --> 00:04:09,120 Speaker 1: That fascinating. Kevin Bagree, I thank you for your insight. 91 00:04:09,160 --> 00:04:12,480 Speaker 1: That is Cameron. He is the interpendent economist. 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