Clear eyed focus needed on economy’s supply side

Many economists believe the country will have bounced out of recession after two consecutive contractions, in the fourth quarter of last year and first quarter of this year, which meant a technical recession.

HSBC chief economist for Australia and New Zealand Paul Bloxham, says recent activity indicators suggest the country is in a recession.

Speaking at a recent Auckland FINSIA breakfast, he says inflation has been extraordinarily high relative to recent history and the targets central banks set. “We have had this really large lift in inflation and that's been front and centre for policymakers.”

He says the economy has become extraordinarily complicated and difficult to fit together for a lot of people. “Unless people watch it every day, follow it all the time and have a really good framework for thinking about it, it's fair to say others shouldn't feel too bad that it's actually quite difficult to make head or tail of exactly how it fits together.”