Banks' forecasts of an economic contraction in the second quarter are probably right, independent economist Cameron Bagrie says. 

ASB’s revised outlook shows the bank expects annual GDP growth of 1.3% this year, down from its previous forecast of 2.9%, thanks to higher fuel prices hitting consumer spending. 

It expects the economy to contract by 0.3% in the second quarter and expand by 0.3% in the third, with New Zealand’s economic recovery now “unlikely” before 2027. 

Bagrie told Ryan Bridge those forecasts were a “central scenario” but there was a lot of variance, as nobody had a firm idea of how long the war would last. 

The economy would likely move backwards in the next quarter, and GDP per capita was still down 3.4% from its peak three years ago. 

While that didn’t technically qualify as a recession —which requires going backwards for two quarters in a row— “it’s still going to feel like it’s pretty tough out there”. 

LISTEN ABOVE 

Banks' forecasts of an economic contraction in the second quarter are probably right, independent economist Cameron Bagrie says.&nbsp;
ASB’s revised outlook shows the bank expects annual GDP growth of 1.3% this year, down from its previous forecast of 2.9%, thanks to higher fuel prices hitting consumer spending.&nbsp;
It expects the economy to contract by 0.3% in the second quarter and expand by 0.3% in the third, with New Zealand’s economic recovery now “unlikely” before 2027.&nbsp;
Bagrie told Ryan Bridge those forecasts were a “central scenario” but there was a lot of variance, as nobody had a firm idea of how long the war would last.&nbsp;
The economy would likely move backwards in the next quarter, and GDP per capita was still down 3.4% from its peak three years ago.&nbsp;
While that didn’t technically qualify as a recession —which requires going backwards for two quarters in a row— “it’s still going to feel like it’s pretty tough out there”.&nbsp;
LISTEN ABOVE&nbsp;

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

Early Edition with Ryan Bridge

Cameron Bagrie: Independent Economist on the economic forecasts around GDP and economic growth

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/a501bcc7-0866-4e9b-b9e3-b41d0166d917/transcript