1 00:00:00,040 --> 00:00:03,680 Speaker 1: The recovery twenty twenty six, are we go or not? 2 00:00:04,519 --> 00:00:07,120 Speaker 1: The manufacturing, the services sector, the confidence, that's all in 3 00:00:07,120 --> 00:00:09,680 Speaker 1: the right direction, But then inflation three point one, sticky 4 00:00:10,039 --> 00:00:12,479 Speaker 1: housing banks pulling back on those forecasts. So where are 5 00:00:12,480 --> 00:00:16,280 Speaker 1: we at? Unconvincing is the word informetrics are using this morning. 6 00:00:16,600 --> 00:00:19,000 Speaker 1: Gareth Kenan is the chief forecaster of course, and is 7 00:00:19,040 --> 00:00:23,079 Speaker 1: with Gareth morning weding. Mike, you're breaking my heart. What 8 00:00:23,120 --> 00:00:24,560 Speaker 1: are you seeing here? What's going on? 9 00:00:25,960 --> 00:00:28,080 Speaker 2: Well, it's the feeling of deja avou. Really it started 10 00:00:28,120 --> 00:00:30,960 Speaker 2: twenty twenty twenty five. We were looking at it and going, hey, 11 00:00:30,960 --> 00:00:32,800 Speaker 2: it's going to get better this year. All the sort 12 00:00:32,840 --> 00:00:35,519 Speaker 2: of block building blocks are in place. This year we're 13 00:00:35,560 --> 00:00:37,880 Speaker 2: looking and going, yeah, they're there, They're still there, and 14 00:00:38,200 --> 00:00:40,879 Speaker 2: some of the indicators are improving and certainly better than 15 00:00:40,920 --> 00:00:43,440 Speaker 2: we have twelve months ago. But you've still got all 16 00:00:43,440 --> 00:00:46,639 Speaker 2: these things hanging over us, going, you know, our household's 17 00:00:46,680 --> 00:00:49,199 Speaker 2: confident enough. Have we got costs of living pressures that 18 00:00:49,240 --> 00:00:51,880 Speaker 2: are still there? Yes, we do, as the risks and 19 00:00:52,000 --> 00:00:55,279 Speaker 2: interest rates arising sooner than we previously thought, Yes, there are. 20 00:00:55,360 --> 00:00:58,320 Speaker 2: So we're trying to convince ourselves as much as anyone else, 21 00:00:58,320 --> 00:00:58,720 Speaker 2: I thank you? 22 00:00:58,800 --> 00:01:02,080 Speaker 1: So is this all psychological now? Because I was astonished 23 00:01:02,120 --> 00:01:04,640 Speaker 1: by that Q three GDP number of one point one 24 00:01:05,040 --> 00:01:09,039 Speaker 1: mid wind fest last year we were actually growing. 25 00:01:10,000 --> 00:01:12,680 Speaker 2: Yeah, was coming off of minus one the quarter before though, 26 00:01:12,720 --> 00:01:14,840 Speaker 2: So you know, you take the six months all together, 27 00:01:14,880 --> 00:01:16,720 Speaker 2: and we've done nothing right. And that's very much the 28 00:01:16,720 --> 00:01:19,160 Speaker 2: story of the last sort of two to three years. 29 00:01:19,200 --> 00:01:23,280 Speaker 2: You're going sideways rather than up. Look, things are improving, 30 00:01:23,280 --> 00:01:26,160 Speaker 2: but I think the problem for households in particular is 31 00:01:26,319 --> 00:01:29,280 Speaker 2: just around. You've been told for three years this thing 32 00:01:29,400 --> 00:01:31,360 Speaker 2: is going to get better, just around the corner, and 33 00:01:31,760 --> 00:01:34,160 Speaker 2: you're tired of hearing that story, aren't you? And like 34 00:01:34,240 --> 00:01:37,240 Speaker 2: I say, you've still got those cost of living pressures 35 00:01:37,240 --> 00:01:39,120 Speaker 2: that we've done a bit of work. And while headline 36 00:01:39,160 --> 00:01:41,880 Speaker 2: inflation is running at three which isn't a great number anyway, 37 00:01:42,080 --> 00:01:44,399 Speaker 2: the stuff that you have to spend money on, the essentials, 38 00:01:44,440 --> 00:01:47,000 Speaker 2: that's still running at four percent, and you're looking at 39 00:01:47,040 --> 00:01:49,240 Speaker 2: there and going, well, you know, I'm just struggling to 40 00:01:49,240 --> 00:01:51,840 Speaker 2: make ends meet in some cases. And there's no sign 41 00:01:52,000 --> 00:01:54,080 Speaker 2: or not much sign. There are some signs, but not 42 00:01:54,200 --> 00:01:56,360 Speaker 2: much that the labor market is turning around as well. 43 00:01:56,480 --> 00:01:59,160 Speaker 1: That inflation number seems to be in Australia, seems to 44 00:01:59,160 --> 00:02:01,560 Speaker 1: be in Britain, seems to be and it seems global, 45 00:02:02,160 --> 00:02:04,040 Speaker 1: is it? And does that make any difference? And are 46 00:02:04,120 --> 00:02:05,680 Speaker 1: we any worse off than anyone else? 47 00:02:07,760 --> 00:02:09,400 Speaker 2: I think I think the issue here is that we 48 00:02:09,520 --> 00:02:12,160 Speaker 2: probably cut interest rates more than everyone else in an 49 00:02:12,200 --> 00:02:15,520 Speaker 2: attempt to sort of stimulate the economy, perhaps losing a 50 00:02:15,520 --> 00:02:18,000 Speaker 2: little bit of a sort of focus on the core 51 00:02:18,280 --> 00:02:21,440 Speaker 2: task of the Central Bank, which is to keep inflation 52 00:02:21,639 --> 00:02:25,359 Speaker 2: under control, in a desperate attempt to get growth going. Yes, 53 00:02:25,400 --> 00:02:28,400 Speaker 2: there are global aspects to it, but the reality is, 54 00:02:28,480 --> 00:02:31,480 Speaker 2: you know, we haven't got the economy rolling as much 55 00:02:31,480 --> 00:02:33,640 Speaker 2: as we might have liked from those interest rate cuts. 56 00:02:33,800 --> 00:02:36,360 Speaker 2: Yet could still happen. There should still be more stimular 57 00:02:36,400 --> 00:02:38,600 Speaker 2: or stimulus or effect of that coming through this year. 58 00:02:39,000 --> 00:02:42,160 Speaker 2: But yes, I mean it's a balancing act for the 59 00:02:42,160 --> 00:02:42,800 Speaker 2: Reserve Bank. 60 00:02:42,919 --> 00:02:44,519 Speaker 1: I was watching some more on the House at question 61 00:02:44,600 --> 00:02:47,680 Speaker 1: time yesterday's talking tradables, non tradables, et cetera. On the 62 00:02:47,720 --> 00:02:49,960 Speaker 1: non tradeables. How much are we shooting ourselves on the 63 00:02:49,960 --> 00:02:51,919 Speaker 1: foot going back to the rates and the insurance and 64 00:02:51,960 --> 00:02:52,800 Speaker 1: all that sort of stuff. 65 00:02:54,840 --> 00:02:56,960 Speaker 2: Look, I mean the government side of it, and some 66 00:02:57,000 --> 00:03:00,160 Speaker 2: of those sort of administered prices such as electricity, where 67 00:03:00,280 --> 00:03:02,840 Speaker 2: you know, again it is regulatory stuff that's driving it up. 68 00:03:03,280 --> 00:03:05,520 Speaker 2: That is part of part of the issue. But there 69 00:03:05,560 --> 00:03:07,160 Speaker 2: is a sense when we look through some of those 70 00:03:07,200 --> 00:03:09,560 Speaker 2: other numbers that you know, the spare capacity that there 71 00:03:09,560 --> 00:03:12,000 Speaker 2: has been in the economy over the last couple of 72 00:03:12,040 --> 00:03:15,200 Speaker 2: years not really acting as quite the sort of anchor 73 00:03:15,240 --> 00:03:18,160 Speaker 2: for inflation and bringing some of those sort of cost 74 00:03:18,160 --> 00:03:20,720 Speaker 2: pressures down as we might have liked. I mean to 75 00:03:20,760 --> 00:03:23,480 Speaker 2: put it simply, businesses three or four years ago they 76 00:03:23,520 --> 00:03:25,600 Speaker 2: were forced to put prices up because everyone was coming 77 00:03:25,680 --> 00:03:28,640 Speaker 2: under massive cost pressure. Now you know, there's still some 78 00:03:28,680 --> 00:03:30,880 Speaker 2: cost pressures there and businesses are going, you know what, 79 00:03:31,120 --> 00:03:33,120 Speaker 2: growth may not be and demand may not be as 80 00:03:33,120 --> 00:03:35,240 Speaker 2: strong as I'd like, but I'm going to go down 81 00:03:35,240 --> 00:03:35,960 Speaker 2: that path again. 82 00:03:36,240 --> 00:03:39,520 Speaker 1: How much of this is a productivity discussion in the 83 00:03:39,600 --> 00:03:42,520 Speaker 1: sense that if hikes come sooner than we think and 84 00:03:42,720 --> 00:03:44,880 Speaker 1: suddenly we're going, well, hold on, was that it was it? 85 00:03:45,040 --> 00:03:47,680 Speaker 1: Then that just tells us the story that this economy 86 00:03:47,880 --> 00:03:51,760 Speaker 1: just doesn't have the wherewith all productivity speaking, to get 87 00:03:51,760 --> 00:03:52,680 Speaker 1: some grunt going. 88 00:03:54,000 --> 00:03:56,160 Speaker 2: And certainly that will be a great answer to the 89 00:03:56,240 --> 00:03:58,400 Speaker 2: question of you know, how we can grow better and 90 00:03:58,480 --> 00:04:01,160 Speaker 2: faster and that kind of thing without running into some 91 00:04:01,200 --> 00:04:05,240 Speaker 2: of these sort of speed limits and constraints. Look, you 92 00:04:05,280 --> 00:04:07,360 Speaker 2: go back ten years, how did we grow the economy 93 00:04:07,360 --> 00:04:09,720 Speaker 2: through the second half of the last decade. It was 94 00:04:09,760 --> 00:04:13,240 Speaker 2: through more people. It wasn't through productivity particularly, and so 95 00:04:13,320 --> 00:04:15,200 Speaker 2: we haven't got the people coming in at the moment. 96 00:04:15,400 --> 00:04:19,240 Speaker 2: How we're struggling to grow in that regard. So yeah, look, productivity, 97 00:04:19,279 --> 00:04:21,320 Speaker 2: if we could find the magic cure for that, that 98 00:04:21,400 --> 00:04:22,400 Speaker 2: would be fantastic. 99 00:04:22,480 --> 00:04:24,159 Speaker 1: Good talk to you, have a good weekend. Make Kareth 100 00:04:24,240 --> 00:04:26,920 Speaker 1: keenan infa Metric's chief forecaster, and that in a way, 101 00:04:26,960 --> 00:04:29,279 Speaker 1: if you believe what he says, is why the election 102 00:04:29,400 --> 00:04:32,040 Speaker 1: date is November seven and not in September. 103 00:04:32,680 --> 00:04:35,560 Speaker 2: For more from The Mike Asking Breakfast, listen live to 104 00:04:35,680 --> 00:04:38,760 Speaker 2: news talks that'd be from six am weekdays, or follow 105 00:04:38,800 --> 00:04:40,360 Speaker 2: the podcast on iHeartRadio.