Podcast Appearances
or wherever at the restaurant so you know the overall spending takes a takes a hit from that so there's you know there is circularity here and this is what will go into the big treasury models and the reserve bank models i've just got one in my head which i'm kind of sort of weighing all this up but um yeah so it's definitely not clear cut um but i think for me
you know, there's the big uncertainty about how long it will last.
But I guess I just probably worry more about the wider economic impact.
It's the real economy.
If people are having to pay more for petrol, if this is crimping business spending, business activity, then eventually there's going to be a downwards economic impact here, and especially global uncertainty as well.
I mean, you know, we just talked about the GDP numbers.
It was pretty much held up by agriculture.
If we can't
export as much if you know if shipping's disrupted um all of that stuff that that's gonna that's gonna hurt the economy for sure and and with the spare capacity that already exists uh you know that will hopefully hold inflation a bit lower than it otherwise might have been but then that weakening economy would would bring down inflation as well so um
you know, I tend to lean more towards the side of sort of being cautious about the economy, and that should sort of keep some sort of level of reassurance at the Reserve Bank in terms of how much they really need to react with higher interest rates.
But they've only got one target, and that is the inflation rate.
And so, you know, almost whatever the economy's doing, they've got the target of inflation.
And if inflation's going up, it gets...
Gets a wee bit awkward.
So I'm conscious of that sort of trade off as well.
And that conflict there between weighing up the balance of higher inflation versus the weakening economy.
So, yeah, that's what the people have to weigh up, I guess, when they make these decisions.
But for me, in the back of my mind, I just think this this this can't be good for the economy.
Yes, there's inflation impact in the near term, maybe the medium term.
But ultimately, this is a negative story for the economy.