Liam Dann: Business Editor on NZ officially out of recession, what's to come for the economy

New Zealand has climbed out of a recession as the economy grew 0.7% in the December quarter. 

The outcome was better than economists predicted and Finance Minister Nicola Willis is pleased with the results. 

What are the chances of the number being revised down again later? 

New Zealand Herald Business Editor Liam Dann answers all the important questions with Tim Beveridge. 

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Episode Transcript

Speaker 1 (00:00):
Some time to say good afternoon or is it good
evening now? To Liam Dan New Zealand Heerild Business Editor
at large, Liam High, good tim so well. New Zealand's
climbed out of recession. Woohoo.

Speaker 2 (00:11):
Yeah, it's really hard to know. Look that it was
a better than expected result. It's definitely a good thing.
Let's say we're who before we get into the final
details of going through the economist reports that they're very
quick to move into cautious mode and start telling us,
you know why, we can't be celebrating yet. But look,

(00:32):
it's better than the alternative, which was that it came
in worse than expected. I think people were probably feeling
a bit more gloomy, certainly in the cities. I think.

Speaker 1 (00:42):
So the economy grew zero point seven in the December quarter,
better than the economists had predicted. Nikola Willis was upbeat
on the show an hour ago.

Speaker 3 (00:51):
Tells us that we're turning the corner, which is what
New Zealand does need after a very tough time with
high inflation, high interest rates and growth bouncing along the bottom.
The numbers today are better than was forecast and tell
us that recovery is underway.

Speaker 1 (01:06):
So actually she didn't sound as up beat as I
thought she would be, maybe because we're still digging ourselves out.

Speaker 2 (01:11):
Well, she knows, she's got to be a bit cautious, right, Yeah. Look, look,
this quarter we're currently in has felt like it hasn't
been a boomer. We've seen some fairly grim consumer confidence
numbers in the last week or so, and there's just
a feeling that maybe you know, the uncertainty around well

(01:32):
the global economy, but also things like you know, New
Zealand's housing market just hasn't surged back quite as quickly
as people might have hoped from the lower interest rates.
And you know, the things that underpinned this GDP result
were stronger tourism, which which sort of lifted retail spending
and spending by tourists lifted some of the categories. And

(01:53):
of course the really good you know, dairy and meat
export conditions we've had and prices we've had has lifted
primary sector. But then you know, in the cities, which
is where I'm doing most of my living, you know,
people are still struggling, you know, with the cost of
living and with with sort of insecurity about jobs and

(02:14):
rising unemployment and those sort of things. So I think,
you know, it's not necessarily a straight line recovery, and
we have to be prepared for them, you know, maybe
to stare a little bit. I'd like to think we
don't go back, you know, we will keep growing.

Speaker 1 (02:26):
I think, well, you know, it's hard for the average
sort of person to work out what their reactions should be.
So what's the reaction of the country's economists.

Speaker 2 (02:35):
Well, yes, definitely cautious. You know, there's saying I think
they're agreeing that is, you know, it is a corner
turned or the first step on a road to recovery.
I think that the Kiwi Bank guys said, and even
even Stephen Topless at Benz, who's pretty pretty cautious, he
was saying, it's it's the start of recovery. But you know,

(02:55):
he points out that on the current numbers, you know,
on the GDP per capita, you've got to get to
twenty twenty eight before we're back to the to the
kind of peaks we had before the downturn started. So
that's a long slow recovery on a per capita basis,
which it was nice to see per capita GDP turn,
but that's partly a fact a function of few you know,

(03:18):
slow population growth, so that sort of sorts itself.

Speaker 1 (03:21):
Yeah, I think I enjoyed the I think it was
Qbank's economists you said, we're crawling out of recession, which
was slightly we're putting it. What are the chances of
the number being revised down later on, because you know,
we've seen it happen before, and we yeah.

Speaker 2 (03:34):
Look it's entirely possible. I mean, could could be revised
up to I mean that the difficulty is, it seems
to be that capturing everything that moves in the economy
a very difficult task and you've got to get it
for the record, absolutely right. So if it turns out
that they've they need longer and then it becomes fear
that it could be revised, but I wouldn't panic about that.

(03:56):
It's it's it's like we had some bad revisions that
that you know, that that really slammed home the pain
of the recession in the middle of last year. But
the latest numbers there wasn't too much revision there to
the to the earlier numbers. I think I think you know,
we are seeing you know, New Zealand does tend to
hum when the dairy industry hums, and that's obviously good

(04:19):
tourism coming back to sort of pre COVID levels. At
least you can say this is the basics of the
economy coming right. So if the if these things continue
to stay buoyant, and then interest rates continue to fall,
then you start to get the frothier stuff, the consumer
spending and and and and things, you know, central city

(04:39):
workers and things starting to feel more confident, and hopefully
that follows and this this might be the kind of
psychological boost that helps us on our way.

Speaker 1 (04:47):
Excellent. Hey, thanks so much, Liam. That's Liam down New
Zealand Hero Business Editor at Large. For more from Heather
Duplessy Allen Drive, listen live to news talks.

Speaker 2 (04:56):
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