Sharon Zollner: ANZ Chief Economist ahead of the final GDP announcement

Several of the major banks expect a significant bounce back in GDP for Q3 when Stats NZ releases its economic figures later this morning. 

Westpac and ANZ both predict a gain of about one percent, putting that down to a jump in activity across the board. 

ANZ Chief Economist Sharon Zollner told Heather du Plessis Allan while she's nervous some of that could turn up in the revised numbers down the track, it's looking positive. 

She says some of the corners should be knocked off the volatility in the economy and the overall level of GDP will be revised up. 

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Episode Transcript

Speaker 1 (00:00):
So we've got the GDP number out for Q three
later later today. It's expected to show a significant bounce
back after Q two's horror number, which, by the way,
should also be revised. Sharon's Honor is A and z's
chief economist and with us morning.

Speaker 2 (00:12):
Sharon, good morning.

Speaker 1 (00:14):
So do you have Q three at one percent growth?

Speaker 2 (00:17):
We do, but we are a bit nervous that some
of that could turn up in revision, So the headline
number might look a bit different, but the overall story
should be that some of the corners get knocked off
the volatility, and likely the overall level of GDPs will
be revised up. That typically happens at this time of
the years that to Zion books under the sofa, at

(00:38):
some annual numbers that get put into it at this
time here.

Speaker 1 (00:42):
What do you expect the revision on Q two to be?

Speaker 2 (00:45):
Oh, we don't predict revisions, but I would say that
of the Q three number, that's point the one percent
we're expecting, maybe half is a noise, sort of a
rebound from the weaknesses you two and half is sort
of cyclical drenths that we're seeing coming through. So that
sort of is just sort of some idea of the
potential range of revisions. But yeah, no, it's hard enough

(01:07):
to predict the latest number, let alone predicting well.

Speaker 1 (01:11):
Looking at the moment towards twenty twenty six, it looks
like it's going to be a lot better, right, But
then you get the services number like we did this week,
and it casts a bit of doubt. What do you think.

Speaker 2 (01:20):
Yeah, it's really interesting that some of the undercators appointing
in different directions, But I guess that's what you're going
to get at turning points, isn't it. You know, the
events where one business is saying actually things are taking
off and the one next to them looks at them
and disbelief. It is just that kind of patchiness that
you see. That said, in our business survey, we have

(01:41):
seen quite a wide range of sectors saying that's not
just that they're more optimistic, but that the here and
now has improved. We'll get an update on that tomorrow
along with consumer confidence as well.

Speaker 1 (01:53):
Now, the news I see the new Reserve Bank governor
has made quite an effort to intervene in the markets,
the wholesale markets. Is it actually done very much?

Speaker 2 (02:02):
Yeah? We saw the new John DOLLA down a bit.
We saw rates down a bit too. They're still well
up on where they were because fundamentally, the market has
just reassessed the prospects of further cuts and now believes
there is a bank when they say that unlikely, and
indeed the government did reiterate that they think they're done cutting.
Her point was more that they're not likely to be
hiking anytime soon. Technically the market was pricing hikes from July.

(02:26):
That I wouldn't interpret it literally because it was more
a reflection of large flows of money going through, including
everyone racing to fix their mortgage, trying to race through
a small door, and just causing some liquidity there.

Speaker 1 (02:39):
She seems to be quite keen on the idea of
having another OCR decision in the calendar year, and it
sounds like possibly over summer. Would you be into that?

Speaker 2 (02:48):
Yeah, I think it makes sense, and so far as
it is a very long break. She has also just
demonstrated that they can influence the market outside of that timetable,
but there is certainly very useful discipline process that they
go through. So it is a bit more where the
speech is a bit more ad hoc. So in that regard, yeah,

(03:09):
I think it would certainly bring new Jean Moore into
line with international norms.

Speaker 1 (03:13):
Good stuff, Sharon, Thanks very much. Enjoy your day that
Sharon's on the A and Z Chief Economist.

Speaker 2 (03:17):
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Speaker 1 (03:21):
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