1 00:00:00,120 --> 00:00:02,800 Speaker 1: Yet another bank is picking a decent recovery this year. 2 00:00:02,800 --> 00:00:05,600 Speaker 1: It's Keiwibank says it's on with a two point four 3 00:00:05,600 --> 00:00:08,080 Speaker 1: percent GDP increase for twenty six. But the bank has 4 00:00:08,119 --> 00:00:10,920 Speaker 1: joined the chorus blaming the Reserve Bank for stuffing up 5 00:00:10,920 --> 00:00:13,920 Speaker 1: the comms leading to increased fixed term rates at the 6 00:00:14,000 --> 00:00:17,159 Speaker 1: major retail banks. Independent economists and founder of Baggery and 7 00:00:17,160 --> 00:00:19,920 Speaker 1: the Economics, Cameron Baggery is with us Morning. 8 00:00:19,720 --> 00:00:21,320 Speaker 2: Cam, good morning. 9 00:00:21,520 --> 00:00:23,480 Speaker 1: Is it as simple as Key Bank has made it? 10 00:00:23,680 --> 00:00:25,959 Speaker 1: And to be fair, most of us by blaming the 11 00:00:26,000 --> 00:00:26,840 Speaker 1: Reserve Bank for this? 12 00:00:28,400 --> 00:00:33,240 Speaker 2: No wholesale interest rates started to move up in advance 13 00:00:33,400 --> 00:00:36,199 Speaker 2: of the reserve banks, sort of what we call pivot 14 00:00:36,680 --> 00:00:39,920 Speaker 2: and their latest monetary policies happened. What's the victim here? 15 00:00:40,159 --> 00:00:42,680 Speaker 2: You know? What's how do we point the finger out? 16 00:00:42,680 --> 00:00:45,800 Speaker 2: We point the finger at an economy that's actually starting 17 00:00:45,800 --> 00:00:48,120 Speaker 2: to show a little bit of a heartbeat. Yeah. Our 18 00:00:48,240 --> 00:00:52,760 Speaker 2: sales are up quite strongly. Construction activities started to move 19 00:00:52,800 --> 00:00:55,560 Speaker 2: back up, albeit of a low base. If you look 20 00:00:55,600 --> 00:00:58,360 Speaker 2: at business lending, it started to move up as well. 21 00:00:58,480 --> 00:01:01,400 Speaker 2: Tract the sales are moving up. Ours work were positive 22 00:01:01,840 --> 00:01:05,119 Speaker 2: as well. We had a horror GDP number in Q two, 23 00:01:05,520 --> 00:01:08,000 Speaker 2: we're going to get a decent rebound in Q three, 24 00:01:08,240 --> 00:01:10,200 Speaker 2: there's the economy knocking the ball out of the park. 25 00:01:10,319 --> 00:01:13,440 Speaker 2: The answer is no, we're still struggling overall, but we've 26 00:01:13,440 --> 00:01:16,240 Speaker 2: turned the corner. When you turn the corner, interest rates 27 00:01:16,240 --> 00:01:18,280 Speaker 2: don't need to be as low. So what we've seen 28 00:01:18,360 --> 00:01:21,720 Speaker 2: is it interest rate markets have just repriced how much 29 00:01:21,760 --> 00:01:24,399 Speaker 2: stimulus will support that they think the Reserve Bank needs 30 00:01:24,440 --> 00:01:26,319 Speaker 2: to give us over the next sort of twelve months. 31 00:01:26,760 --> 00:01:28,640 Speaker 1: What are you pecking next year is going to be like? 32 00:01:28,760 --> 00:01:30,680 Speaker 1: Is it going to be blockbuster growth or is it 33 00:01:30,720 --> 00:01:32,440 Speaker 1: going to be a little bit more like what Simon 34 00:01:32,480 --> 00:01:35,440 Speaker 1: Bridges are saying, which is it's going to be growing, 35 00:01:35,440 --> 00:01:37,480 Speaker 1: but it's not going to feel all together that flash 36 00:01:37,520 --> 00:01:39,440 Speaker 1: because of the election and various other things. 37 00:01:40,760 --> 00:01:43,679 Speaker 2: Oh, election, a whole lot of other factors. Look, there's 38 00:01:43,720 --> 00:01:47,120 Speaker 2: an awful lot of stimulus that's in the pipeline. The 39 00:01:47,240 --> 00:01:50,120 Speaker 2: rural sector is obviously meant doing pretty well. They haven't 40 00:01:50,160 --> 00:01:54,320 Speaker 2: fully opened the checkbook yet. Dairy prices started to recede, 41 00:01:54,400 --> 00:01:57,000 Speaker 2: so they'll probably cre a little bit about plan spending back. 42 00:01:57,040 --> 00:02:01,120 Speaker 2: We've got to find pierre injection. You've got the impact 43 00:02:01,200 --> 00:02:03,640 Speaker 2: of loan registraits that there's a whole lot of cyclical 44 00:02:03,680 --> 00:02:07,040 Speaker 2: support in the pipeline that's going to have us moving forward. 45 00:02:07,200 --> 00:02:09,040 Speaker 2: The problem, Heather, is that we've still got all these 46 00:02:09,080 --> 00:02:13,080 Speaker 2: structural problems. You've got problems across the education set, You've 47 00:02:13,080 --> 00:02:17,440 Speaker 2: got problems across infrastructure, road cone oiitus. The biggest, biggest 48 00:02:17,480 --> 00:02:21,160 Speaker 2: issue is just weak productivity growth. We've become a very 49 00:02:21,200 --> 00:02:23,919 Speaker 2: inefficient nation over the last sort of twelve months. The 50 00:02:24,360 --> 00:02:26,480 Speaker 2: biggest issue, or the biggest concern I've got is that 51 00:02:26,520 --> 00:02:28,720 Speaker 2: we're going to stare pick up and demand that's baked in. 52 00:02:30,160 --> 00:02:32,360 Speaker 2: The concern I've got is that do we have the 53 00:02:32,400 --> 00:02:36,399 Speaker 2: supplies of capacity to absorb that demand by the utilization 54 00:02:36,480 --> 00:02:38,840 Speaker 2: of resources. Because if we do not have a capacity 55 00:02:38,880 --> 00:02:41,680 Speaker 2: to absorb demand, the Reserve Bank is going to see 56 00:02:41,680 --> 00:02:44,440 Speaker 2: inflation sticking up around three percent and that will be 57 00:02:44,440 --> 00:02:45,040 Speaker 2: a problem. 58 00:02:45,440 --> 00:02:47,280 Speaker 1: Now listen very quickly, you're doing the debate. 59 00:02:48,800 --> 00:02:50,600 Speaker 2: I'm not quite sure, but at the moment, I think 60 00:02:50,600 --> 00:02:52,920 Speaker 2: my name has been put down on the table to 61 00:02:53,000 --> 00:02:56,400 Speaker 2: moderate from one side. We're just waiting for acceptance on 62 00:02:56,440 --> 00:02:58,160 Speaker 2: the other side. And regard that a weather I'll be 63 00:02:58,280 --> 00:02:58,880 Speaker 2: a moderator. 64 00:03:00,080 --> 00:03:02,560 Speaker 1: Suspice I we'll see you again this week, Cameron, Thanks 65 00:03:02,639 --> 00:03:05,400 Speaker 1: very much. Cameron Bagriy Independent Economists, founder of Baggriy Economy 66 00:03:05,720 --> 00:03:08,720 Speaker 1: Economics and might be the moderator of the Ruth Richardson 67 00:03:08,800 --> 00:03:12,200 Speaker 1: Nichola Willis Debate. For more from the Mic Asking Breakfast, 68 00:03:12,360 --> 00:03:13,840 Speaker 1: listen live to news talks. 69 00:03:13,880 --> 00:03:17,040 Speaker 2: It'd be from six am weekdays, or follow the podcast 70 00:03:17,080 --> 00:03:17,960 Speaker 2: on iHeartRadio.