September 15, 2025 • 6 mins
We talk GDP, GDT and OCR with an independent economist.
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Episode Transcript
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Speaker 1 (00:00):
He's an independent economist. His name is Cameron Bagriy. It's
a big week for the economy. GDT auction tonight, GDP
numbers on Thursday. We'll start with GDP Cameron. The banks
are picking a contraction of somewhere between zero point three
and zero point five percent if we get another quarter
(00:22):
September quarter. We're currently and also in retraction. We're in recession.
Speaker 2 (00:27):
You'll the economy's yeah, done a David Long. We've stopped
for a cup of tea. So I've got a growth
into twenty twenty four. Start of two and twenty five.
A lot of their growth has been coming out of
the rural communities. The housing market has sort of failed
to kack on. There's been a few structural issues in
regard to cost I entergy prices that have mocked in
(00:48):
various parts of the manufacturing sector around. The recovery is
still coming together. It's just taken a little bit time.
At the moment we're relied upon the farmers, and a
farming set to a lie and carried the entire economy.
You need other sectors to step up to the plate.
That's coming. It's just coming with a bit of a lag.
Seventy five percent of mortgages who can refinance in the
(01:10):
coming twelve months, So there's still a little bit of
an Egyptian to ripping. Jamie will still be structural as
she's out there. Whether you look at infrastructure. We look
at the doubling and gas prices, whether you look at infrastructure,
cyclical support I e. Loya interest rates, the strong, commodity
prices lower and museum on dollar, and we's going to
(01:30):
head to head with some pretty big structural problems we've
still got across this economy.
Speaker 1 (01:34):
I put it to you that we've hit the bottom
and very very slowly on our way back up. Do
you agree with that?
Speaker 2 (01:41):
Yeah, we are. And I guess why I viewed at
the moment is a I'm after quality as opposed to quantity,
and what we're seeing at the moment is that there's
not too much quantity out the end. But that is
quality because it's an earning lead recovery coming from the
ex books, coming from the rural communit piece. It's got
a bit at backbone. The last thing I think we
(02:02):
need or want as the oak and property market lead
this economic recovery, because there'll be a born spin soul
recovery and borron spend. There's a short term sort of thing.
It's not a long term thing of substance.
Speaker 1 (02:12):
I'm going to come back to the GDT having covered
the GDP, but I want to talk about the OCR
It's acronym day to day on the country, Cameron Bagriy.
We all agree, or everyone seems to agree, it's going
to go to two point five percent. The question I'm
going to ask you now is when do we get there?
Do we get there in November of this year or
do we get there in February of next year? And
(02:35):
why not? Why wouldn't the Reserve Bank go fifty basis
points next time?
Speaker 2 (02:40):
To the batter's box if he goes fifth year him?
Do I think of a little bit of panic out there?
And the Reserving's job at the moment is pretty complicated,
because what we've got is that if you looked at
the economy alone, how it's performing, you'll be betting up
and giving it a bit of a NUTCH at least
(03:00):
once or twice. Of course, the Reserve being has gone
an inflation target, and what we know out there at
the moment is that headline inflation is moving up now,
thank god, core inflation is hitting south. But there's a
little bit of stickiness coming through with the inflation story
that the Reserve ben This needs to be a little
bit mindful of at the moment. So yes, are you're
going to go infestrates moving into what's called the military zone.
(03:24):
That's when the Reserve bank starts pushed on the accelerator.
In the past eight months, I've only taken the foot
off the break, so they're now starting to push. Going
to push on the acceleraer that's going to help you
kind of out. But let's not forget that when you're
pushing the accelerator, you start to push inflation up on
the other side. And I guess your people have learned
the hard way of the past of a few years.
Is the infletion is pretty ruthless. That Sarah, it's the
(03:45):
thief to take money out of your pockets.
Speaker 1 (03:47):
Okay, GDP tech O CR tech now GDT, as I
said acronym day here on the country are my man
at Jarden Mike McIntire specializes in this. Is that the
futures market is picking another drop after a reasonably substantial
drop at the last auction. Is this just classic supply
and demand economics. The price has got to such a
(04:10):
level that global production is ramping up to meet that price.
Speaker 2 (04:15):
Yeah, I think so the market does pretty well because
something if you look at commodity prices, you know, they go,
they come back down. Even if they come back down,
which they are coming back down, they're still sitting there
at pretty elevated levels. So to face stalue. That's when
you combine it with the New Zealand dollar around sixty cents.
That's a fair bit of money in the term for
the farming sector. But yeah, we're talking awful about the
(04:39):
revenue line, Jamie. Yeah, we've got to keep an eye
on that costline because what we know over that sort
of nineteen twenty eighteen to twenty twenty three sort of period,
that cost line with SEBT that moved up an awful
long way, so the revenue line needed to live a
long way on the other side. Revenue coming down. We
just may need to see that that cost line it's
going to be pained for anothers a couple of years
(05:00):
and lower infrastruateture obviously going to help.
Speaker 1 (05:03):
How much is the sugar hit of they lack TALIS
payout if indeed it happens. What is it three billion odd?
How is that going to affect the New Zealand economy?
Because I know that farmers, if they're sensible anyhow, and
most of them are pretty pragmatic, they're going to pay
down debts. Some of that debt relates to paying quite
a bit of money in the past for Fonterra shares,
(05:24):
but some of it will find its way into retail spending,
whether it's on farm or personal.
Speaker 2 (05:31):
Well, you crack the sales anecdotally are starting to move
up a little bit. I work with the numbers. Your
three point two billion dollar potentire pay it four hundred
and fifty billion dollar economy. That's zero point seventy percent
of GDP. So it's a pretty big economic injection out there.
You know, banks might might to take a bit of
(05:51):
a chunk of it. To be fair, Your dairy debt
has come down a long way in the past decade.
Your dairy debt used to be up around forty two
to forty two billion theory debts and there down around
thirty five thirty six billion. Off the top of my head, yes,
balance each to look them pretty good. I suspect of
the affair. Bit of that money is going to be
(06:11):
used for on farm investment, and that's a good thing.
Speaker 1 (06:14):
A wise man once said to me, Cameron, the best
form of investment is to repay debt.
Speaker 2 (06:20):
Well, return on equity versus return on debt. End of
the day, fundamental principle of finances that debt tends to
be cheaper than equity. So if you can use debt,
wisely use it and the truck is to get that
return on the other side of the equation.
Speaker 1 (06:36):
Cameron Bagrie, thanks as always for your time on the country.
Will legally await tonight's GDT auction.
Speaker 2 (06:41):
All the best, Jammy
He's an independent economist. His name is Cameron Bagriy. It's
a big week for the economy. GDT auction tonight, GDP
numbers on Thursday. We'll start with GDP Cameron. The banks
are picking a contraction of somewhere between zero point three
and zero point five percent if we get another quarter
(00:22):
September quarter. We're currently and also in retraction. We're in recession.
Speaker 2 (00:27):
You'll the economy's yeah, done a David Long. We've stopped
for a cup of tea. So I've got a growth
into twenty twenty four. Start of two and twenty five.
A lot of their growth has been coming out of
the rural communities. The housing market has sort of failed
to kack on. There's been a few structural issues in
regard to cost I entergy prices that have mocked in
(00:48):
various parts of the manufacturing sector around. The recovery is
still coming together. It's just taken a little bit time.
At the moment we're relied upon the farmers, and a
farming set to a lie and carried the entire economy.
You need other sectors to step up to the plate.
That's coming. It's just coming with a bit of a lag.
Seventy five percent of mortgages who can refinance in the
(01:10):
coming twelve months, So there's still a little bit of
an Egyptian to ripping. Jamie will still be structural as
she's out there. Whether you look at infrastructure. We look
at the doubling and gas prices, whether you look at infrastructure,
cyclical support I e. Loya interest rates, the strong, commodity
prices lower and museum on dollar, and we's going to
(01:30):
head to head with some pretty big structural problems we've
still got across this economy.
Speaker 1 (01:34):
I put it to you that we've hit the bottom
and very very slowly on our way back up. Do
you agree with that?
Speaker 2 (01:41):
Yeah, we are. And I guess why I viewed at
the moment is a I'm after quality as opposed to quantity,
and what we're seeing at the moment is that there's
not too much quantity out the end. But that is
quality because it's an earning lead recovery coming from the
ex books, coming from the rural communit piece. It's got
a bit at backbone. The last thing I think we
(02:02):
need or want as the oak and property market lead
this economic recovery, because there'll be a born spin soul
recovery and borron spend. There's a short term sort of thing.
It's not a long term thing of substance.
Speaker 1 (02:12):
I'm going to come back to the GDT having covered
the GDP, but I want to talk about the OCR
It's acronym day to day on the country, Cameron Bagriy.
We all agree, or everyone seems to agree, it's going
to go to two point five percent. The question I'm
going to ask you now is when do we get there?
Do we get there in November of this year or
do we get there in February of next year? And
(02:35):
why not? Why wouldn't the Reserve Bank go fifty basis
points next time?
Speaker 2 (02:40):
To the batter's box if he goes fifth year him?
Do I think of a little bit of panic out there?
And the Reserving's job at the moment is pretty complicated,
because what we've got is that if you looked at
the economy alone, how it's performing, you'll be betting up
and giving it a bit of a NUTCH at least
(03:00):
once or twice. Of course, the Reserve being has gone
an inflation target, and what we know out there at
the moment is that headline inflation is moving up now,
thank god, core inflation is hitting south. But there's a
little bit of stickiness coming through with the inflation story
that the Reserve ben This needs to be a little
bit mindful of at the moment. So yes, are you're
going to go infestrates moving into what's called the military zone.
(03:24):
That's when the Reserve bank starts pushed on the accelerator.
In the past eight months, I've only taken the foot
off the break, so they're now starting to push. Going
to push on the acceleraer that's going to help you
kind of out. But let's not forget that when you're
pushing the accelerator, you start to push inflation up on
the other side. And I guess your people have learned
the hard way of the past of a few years.
Is the infletion is pretty ruthless. That Sarah, it's the
(03:45):
thief to take money out of your pockets.
Speaker 1 (03:47):
Okay, GDP tech O CR tech now GDT, as I
said acronym day here on the country are my man
at Jarden Mike McIntire specializes in this. Is that the
futures market is picking another drop after a reasonably substantial
drop at the last auction. Is this just classic supply
and demand economics. The price has got to such a
(04:10):
level that global production is ramping up to meet that price.
Speaker 2 (04:15):
Yeah, I think so the market does pretty well because
something if you look at commodity prices, you know, they go,
they come back down. Even if they come back down,
which they are coming back down, they're still sitting there
at pretty elevated levels. So to face stalue. That's when
you combine it with the New Zealand dollar around sixty cents.
That's a fair bit of money in the term for
the farming sector. But yeah, we're talking awful about the
(04:39):
revenue line, Jamie. Yeah, we've got to keep an eye
on that costline because what we know over that sort
of nineteen twenty eighteen to twenty twenty three sort of period,
that cost line with SEBT that moved up an awful
long way, so the revenue line needed to live a
long way on the other side. Revenue coming down. We
just may need to see that that cost line it's
going to be pained for anothers a couple of years
(05:00):
and lower infrastruateture obviously going to help.
Speaker 1 (05:03):
How much is the sugar hit of they lack TALIS
payout if indeed it happens. What is it three billion odd?
How is that going to affect the New Zealand economy?
Because I know that farmers, if they're sensible anyhow, and
most of them are pretty pragmatic, they're going to pay
down debts. Some of that debt relates to paying quite
a bit of money in the past for Fonterra shares,
(05:24):
but some of it will find its way into retail spending,
whether it's on farm or personal.
Speaker 2 (05:31):
Well, you crack the sales anecdotally are starting to move
up a little bit. I work with the numbers. Your
three point two billion dollar potentire pay it four hundred
and fifty billion dollar economy. That's zero point seventy percent
of GDP. So it's a pretty big economic injection out there.
You know, banks might might to take a bit of
(05:51):
a chunk of it. To be fair, Your dairy debt
has come down a long way in the past decade.
Your dairy debt used to be up around forty two
to forty two billion theory debts and there down around
thirty five thirty six billion. Off the top of my head, yes,
balance each to look them pretty good. I suspect of
the affair. Bit of that money is going to be
(06:11):
used for on farm investment, and that's a good thing.
Speaker 1 (06:14):
A wise man once said to me, Cameron, the best
form of investment is to repay debt.
Speaker 2 (06:20):
Well, return on equity versus return on debt. End of
the day, fundamental principle of finances that debt tends to
be cheaper than equity. So if you can use debt,
wisely use it and the truck is to get that
return on the other side of the equation.
Speaker 1 (06:36):
Cameron Bagrie, thanks as always for your time on the country.
Will legally await tonight's GDT auction.
Speaker 2 (06:41):
All the best, Jammy
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