Nick Tuffley: ASB Chief Economist on Informetrics saying NZ is on the cusp of an economic recovery, fuel prices

There are hopes prices at the pump don't spike as fighting intensifies between the US and Iran.  

Strikes from both sides continue for the sixth day of renewed hostilities. 

The global oil price benchmark Brent Crude has been hovering around US$85 a barrel since the new fighting broke out – its highest point in a month. 

ASB Chief Economist Nick Tuffley told Ryan Bridge he's hopeful we don't see a return to the peaks of US$115 a barrel from when the war first broke out. 

He says we don't want to see diesel prices rise as that's used for all our delivery services. 

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Episode Transcript

Speaker 1 (00:00):
New Zealand on the cusp of an economic recovery if
fuel prices stayed down. That's according to a new report
out this morning from Informetrics. It's forecasting GDP to hit
four year high two point seven percent by mid next year,
the OCR up to three and a half percenters conditions improved.
Nick Tuffy, ASP chief economists with the this morning.

Speaker 2 (00:17):
Hey, Nick, good morning.

Speaker 1 (00:20):
So about on the money.

Speaker 2 (00:23):
Well, we we think of an annualized pace, you could
get growth up to about a bit over three percent
through the middle of next year, but you know, hitting
near for the full year next year growth just under
three percent, So that's fingers crossed. We do get a
bit of a decent rebound coming through in the second
half of this year.

Speaker 1 (00:43):
What about price to fuel or seeing all these stories
about go and fill up now because the price is
going to go up soon.

Speaker 2 (00:50):
Well, there's definitely that risk that they do go up
a little bit. When you look at the wholesale markets,
at least so far, the price of all use it's
gone up a little bit, and refinery margins have gone up,
but nowhere near the sorts of moves that we saw
early on when the war hit and there was a
lot of stress on there. So I'm very hopeful that
we're not going to see anywhere near the sorts of

(01:11):
lists of fuel prices that we saw, and they're going
to remain substantially off their lows. And particularly that price
of diesel is the important one because that's moving around
so much of our goods and that's where a lot
of the cost pressure we've been coming from. Earlier on
in the air.

Speaker 1 (01:25):
We had beneficiary numbers out yesterday. They're up again. Unsurprisingly
given the state of things. It's although slightly I think
it was one percent quarter on quarter, But where is
that going to go? And if we get a coalition
government and again we're likely to get another round of
job cuts from the public service, what does.

Speaker 2 (01:41):
That do well? We think we'll see unemployment in the
short term, So we're sitting around that sort of five
point three five point four percent mark, So just in
the short term, you know, employment itself being relatively soggy,
but also you've got the immigration picking up. As we
head over next year, we speak that unemployment will gradually

(02:01):
gradually fall and we'll be back below five percent. Whilst
we're trekking through to the end of next year. So
look gradual turnaround on that front, but as resumption of growth,
resumption of employment, which is going to help strengthen things
on that front.

Speaker 1 (02:17):
Fantastic. That's what we like to hear, although I didn't
like to hear the word soggy from your neck. Thank you,
Nick Tagler, Economist. For more from Early Edition with Ryan Bridge,
listen live to news Talks. It'd be from five am weekdays,
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