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Speaker 1: Now the Reserve Bank economists Paul Conway over here reckons

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Speaker 1: all those new trade tariffs from Donald Trump are going

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Speaker 1: to lead to lower inflation in New Zealand. Brad Olsen

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Speaker 1: as infametrics principle economists and with us, say Brad.

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Speaker 2: Good evening, I would have thought, I mean, you know, when.

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Speaker 1: You talk about tariff's, your first conclusion is actually that

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Speaker 1: is going to lead to higher inflation. Does it makes

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Speaker 1: sense to you the lower inflation forecast?

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Speaker 2: It does? I mean, I think also Paul Conway has

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Speaker 2: highlighted here that the Reserve Bank still thinks that there's

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Speaker 2: a lot of water to go under the bridge and

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Speaker 2: they're still trying to figure out exactly what the impact

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Speaker 2: will be. But at the same time as yes, tariff's

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Speaker 2: raised prices in the US, and that's I think probably

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Speaker 2: where the reference comes from. Those higher price expectations that

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Speaker 2: we keep talking about with tariffs are concentrated a bit

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Speaker 2: more for the consumers that are paying the tariffs, and

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Speaker 2: those are Americans. For us at home. If we're seeing

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Speaker 2: less trade activity starting to come through, you know, businesses

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Speaker 2: that normally export from New Zealand don't have quite as

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Speaker 2: many as much demand they're not getting as much money

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Speaker 2: in the door, they're not able to spend out as

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Speaker 2: much on other New Zealand businesses, and if demand generally

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Speaker 2: in the economy comes down, there's probably not as much

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Speaker 2: ability to pass on some of those pricing pressures. And

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Speaker 2: so we do wonder if, like the Reserve Bank, if

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Speaker 2: some of this TERRFF activity might well see lower prices

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Speaker 2: than otherwise here at home.

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Speaker 1: Okay, now what do you have. You had to look

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Speaker 1: at the KIWI GDP.

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Speaker 2: I have the new sort of model coming out. I

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Speaker 2: mean it's a useful addition, I think to the conversation.

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Speaker 2: I think we've got to be clear that the Reserve

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Speaker 2: Bank is not saying this is their definite, actual only

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Speaker 2: GDP expectation, but I think it's useful to add into

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Speaker 2: the mix, particularly because we know that other central banks

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Speaker 2: around the world, particularly the US Federal Reserve over in

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Speaker 2: the States, has something similar where they do try to

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Speaker 2: at least outline a bit where they're thinking is and

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Speaker 2: probably more importantly how it evolves, because that's the thing

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Speaker 2: that we're noticing even in the data the last couple

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Speaker 2: of weeks, as there has been some ups, there has

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Speaker 2: been some downs yesterday we had new tourism data out

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Speaker 2: in New Zealand that showed slightly better numbers. At the

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Speaker 2: same time card spending showed spending activity was down to touch.

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Speaker 2: You know, the likes of the housing numbers out today

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Speaker 2: again just another figure into the mix. So I think

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Speaker 2: this model will give us a little bit more of

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Speaker 2: a clue potentially where GDP could land at the end

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Speaker 2: of it, and the Reserve Bank just wanting to put

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Speaker 2: a little bit more data out there so that we

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Speaker 2: can have a more informed conversation. But again I don't

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Speaker 2: think this will replace what they're doing in terms of

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Speaker 2: their estimates that they put out and similar, but it

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Speaker 2: adds just a little bit more transparency around some of

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Speaker 2: the areas that they look into.

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Speaker 1: Is it very different to what Massi University is running.

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Speaker 2: Slightly different in terms of where the data comes from

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Speaker 2: and probably the weights and similar that they put onto

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Speaker 2: it are the likes of GDP Live that Massi University

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Speaker 2: put out, some of that's got some quite big data

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Speaker 2: sets from you know, likes the Kiwi Rail, from food

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Speaker 2: stuffs and similar. This model that the Reserve Bank is

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Speaker 2: running with Kiwe GDP is much more based around official

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Speaker 2: statistics and when they come out over time, but generally

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Speaker 2: they seem to give you similarly informed results. When you

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Speaker 2: start to see some more challenging detail numbers coming through,

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Speaker 2: both of the models will pick that up, but in

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Speaker 2: slightly different ways. So again, I don't think we're going

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Speaker 2: to use this number and go that's definitely going to

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Speaker 2: be it. The numbers will keep being revised and they'll change,

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Speaker 2: but it does let us have a bit more of

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Speaker 2: a look under the hood of what things could be

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Speaker 2: driving the economy at any point in time.

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Speaker 1: Yeah, good stuff, Hey, Brad, thanks very much appreciated. Brad Olson,

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Speaker 1: Infametrix Principal Economisty For more from Heather Duplessy Allen Drive,

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