Liam Dann: NZ Herald business editor at large on New Zealand's economic outlook being downgraded by experts

International research group BMI has lowered its GDP growth forecast for New Zealand for 2024 - and warned of economic challenges to come.

BMI predicted the nation's GDP would grow by just 1 percent this year, down 0.2 percent from previous estimates.

NZ Herald business editor at large Liam Dann unpacked this research further.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So now an international research group has downgraded our economic outlook.
BMI is a division of Fitch Solutions, which also includes
Fitch Ratings. But they all insist the completely independent of
each other and there's nothing to worry about. Here's the problem.
BMI is predicting GDP will grow by just one percent
this year. That's down from one point two percent, which
it was previously thinking. Liam dan is The Herald's Business

(00:21):
editor at large ALM. You know, okay, so they're basing
this by the sounds of things on the first quarter.

Speaker 2 (00:27):
Yes, yeah, they and looking out at some of the
risks and things coming at us. They're looking at consumer spending.
They look at some pretty detailed secondary type data that
Product Producers Index and the PMI and that kind of
stuff for what's happening with manufacturing. I mean, you know,
it's not wildly out of line with some of the

(00:47):
gloomy outlooks from the banks and so forth right now,
but it just shows you that the trend is still
not good. So they're seeing it deteriorating, you know, And
I should add there's there's always that upside. They still
see interest rate cuts this year. In fact, they still
see two of them I think they're.

Speaker 1 (01:07):
Probably really when how do we fit two in?

Speaker 2 (01:09):
I guess no. I think there's an October as well.

Speaker 1 (01:11):
Okay, so they must be done Ontoba November.

Speaker 2 (01:13):
I think that's pushing it. But of course what that
means is that they're in the camp, and the sort
of is two camps. There's the camp that's worried that
this non tradable inflation is just going to be sticky
and stay there for Yeah. There's the other one that goes,
oh no, no, New Zealand's going off for cliff, the
economy's falling.

Speaker 1 (01:29):
Which one do you fall into? Well, I fall into
that we're going off a cliff and we're going to
have to.

Speaker 2 (01:33):
It's weird that that's the more optimistic one. But I think,
like you have been in the let's pull the band
aid off quick camp for a while, and I think
I think things are, you know, slowing pretty fast. And
I mean it's possible that non tradeable inflation, the service
sector stuff and insurance and rentsal just you know, keeps

(01:54):
sticking there for longer. But actually, you know, if if
the economy really starts tanking, yeah, it could also just
come off a lot faster than what the Reserve Bank
is talking about they have to talk to if they
have to, you know, until they see the whites of
its eyes or whatever. You know. But a lot of
the big international players are sticking with these earlier cut

(02:14):
forecasts and you know, pretty downbeat about the prospects for
the next year ahead for us.

Speaker 1 (02:19):
Is this going to affect what Fitch Ratings does?

Speaker 2 (02:23):
It shouldn't, I mean, but they will read it. They'll
read it. They'll read it. They'll read all the econic stuff.
But the stuff coming from the guys down the corridor,
I guess they would be weird if they didn't pay
attention to that. Yes, it also reads fairly similarly to
the kind of commentary that we had to all that
that it was a business test story. Actually I wrote
about where Delepe Fonseka talked to the Fitch Ratings guy

(02:48):
and he said similar things to this. And there's the
warning there that hey, you know, if China, China's economy
doesn't bounce back, or if it slows a bit more,
then the numbers could look even worse for us, because
you know, we're still so reliant on that.

Speaker 1 (03:02):
Yeah, totally, Hey have you like this is so weird?
And I'm sorry to do this here, but I thought
of you when this came out. Have you seen the
surf park that's going to be built in Auckland.

Speaker 2 (03:11):
Yeah, it's pretty cool.

Speaker 1 (03:12):
Are you going to go?

Speaker 2 (03:14):
Well, it's a long time since I got up any
sort of speed on a surfboard, but these waves are
perfect right there.

Speaker 1 (03:20):
Yes, I thought you were more of a surfing.

Speaker 2 (03:22):
Well I did. Used to leave Live and Breathe a
long time ago. I'm know Scott Robertson, you know he's
out there dreaming up you know, how to well listen?

Speaker 1 (03:30):
Would be Would this be your return to surfing?

Speaker 2 (03:33):
It could be because the thing that got me with
surfing right is that if you're not doing it all
the time, the bit where you get out the back
and paddle through all the way had the hard bit. Yeah,
that's the bit that sort of put me off because.

Speaker 1 (03:43):
Would you pay ninety bucks for an hour?

Speaker 2 (03:46):
Oh? Look, I've been and done the skiing up in
north of Auckland. You know it's it's worth a go,
isn't it.

Speaker 1 (03:51):
Yeah?

Speaker 2 (03:52):
Yeah, I probably would give a guard and I might
shout the kids, you know, they're sort of more likely
to get up fast on a.

Speaker 1 (03:58):
B I might shout the kids, what ess father, Liam?
Thank you very much, really appreciated. That's Liam dand The
Herald's Business editor at largest.

Speaker 2 (04:05):
For more from Heather Duplessy Allen Drive, listen live to
news Talks it'd B from four pm weekdays, or follow
the podcast on iHeartRadio