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

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 See omnystudio.com/listener for privacy information.