Nick Tuffley: ASB Chief Economist says GDP has had a strong rebound in the second half of the year

There are signs that green shoots are starting to flourish economically. 

The latest card spending data from Stats NZ shows retail spending was up 1.6-percent last month, compared to November last year. 

Spending was up across the board - on the likes of groceries, household items and clothes.

ASB Chief Economist Nick Tuffley told Ryan Bridge that the GDP for the second half of the year has had a strong rebound. 

He says they're expecting 0.8 percent for the upcoming quarter.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Retailers are morning today. This is after Finally we are
seeing people part with some of their hard earned cash
for November retail cards spending up one point six percent
for the month compared to the previous year, setting a
positive tone ahead of Christmas. Nick Tuffley is asb's chief economist.
With me, Nick, Good evening evening. So we're finally feeling
a bit better. We're finally going out and spending stuff.

Speaker 3 (00:39):
Yes, we are. We look like we had a pretty
good time and have been spinning up of it on
the durabols. So those green shoots starting to flourish a
bit more.

Speaker 2 (00:48):
Are we just spending more because things are more expensive
or are we actually buying more stuff?

Speaker 3 (00:54):
Well, it does look like we are buying more stuff.
We did see in the third quarter that the retail
sales volumes as well as the values were up quite strongly,
so nearly two percent over the quarter. So it looks
again like this will be a list in both the
volume and the value of what we're spending, so not
just about prices. It does it like we're buying more stuff.

Speaker 2 (01:13):
Great, What about we're getting a GDP number next week,
of course for quarter three, which is backwards looking for September.
But you're expecting it to be better than what you
originally thought, are you.

Speaker 3 (01:25):
Yes, we we're expecting point eight percent now, so not
too long ago, we were expecting point five in point
sixteen point seven now point eight, and the manufacturing survey
that was out today suggested that Q four is going
to be pretty good. So at the moment, we're forecasting
previsionally one percent for that quarter. So it does it
like the second half of the year has seen quite
a bit of a rebound.

Speaker 2 (01:46):
And also the first half. I keep going on about
this because it kind of annoyed me. And this is
the problem with the data is it's never accurate on
the day it comes out, right, But do you think
we will revise down? They will revise down next week
the very bad number we got for quarter two.

Speaker 3 (02:02):
Look, it's very possible that that point nine per cent
contraction gets revised or something a bit smaller. But you've
also got to be very mindful though that when we
with this December release, we get a lot of annual
revisions coming through, so we could see some revisions going
back quite some time. But look, it would be a
good Christmas present if we see that big contraction in
the second quarter get revised to something a bit smaller

(02:23):
than what it was.

Speaker 2 (02:24):
Next year, they reckon, we're going to grow faster than Australia.
We're going to grow faster than the Americans, are going
to go faster than the British, and the year after
that too, do you Well, we.

Speaker 3 (02:33):
Do have over two and a half percent growth predicted
for next year and some things we're not too bad
the year after that, so look, it is possible. I
think one thing we've got to bear in mind before
we pat ourselves on the back too much is that
we've come from one of the weaker economies recently, so
we're sort of getting back and growing above trend because
we've been in a bit a bit of a rut.
Whereas other countries slightly different circumstances. Australia's held up much

(02:58):
better than we have over the last couple of years.
If anything, it's still grappling with high inflation, and the
US has been sort of strangling itself a little bit
with tariffs.

Speaker 2 (03:06):
For example, in fascinating stuff. Forward to next week's number.
Nick Tuffley ASB.

Speaker 1 (03:11):
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