Mike Hosking: PM needs to wake up - the GDP figures are important

OPINION

As much as the Prime Minister might like to say it isn't so, there is very little doubt in anyone's mind about what I was asking about yesterday morning.

GDP. It's a simple concept, gross domestic product. It is not the crown accounts, it is GDP.

Why would I be asking about GDP? Because the numbers are out tomorrow.

The crown accounts aren't out Thursday, they are not even out this month. I don't think I have ever asked about crown accounts.

But I have often asked about GDP, and the reason I asked was because of their importance.

The GDP figure is the rock, solid proof of what the economy has been doing.

The overarching theme of this Government this entire year is whether they are slowly, but surely, tanking the economy. The confidence numbers say there is much to worry about. The service sector stats out just this week show the numbers are falling, and we are below the long term average. Plus, the services sector is two thirds of our economic activity.

So the report card on all of that is the quarterly GDP report. In the first quarter to March, it was 0.5 percent. That's not a good number.

In rough terms this economy has been, and should be, growing in the threes - three point something, preferably mid to high threes.

You don't have a three in your figures, when the quarterly numbers are 0.5 percent.

Which made the forecasts from some of the banks this week seem reassuring. Some are forecasting 0.9 percent, others 0.8 percent. Importantly, they all seem to be more bullish than the Reserve Bank, which has a forecast of another 0.5 percent.

If the Reserve Bank is right the government this country is in real trouble, as that would be half a year's worth of economic activity at anaemic rates.

And it would be, without a shadow of a doubt, a direct reflection on this Government and its policies.

Which is why I got the Prime Minister involved. It's a scorecard on her stewardship. Which is what made the comments about being pleased so unusual.

And why the dollar spiked.

I, of course, was being slightly cheeky. I know full well you're not supposed to comment on such matters, the same way the Reserve Bank Governor doesn't make passing judgement on currencies and economic factors before the official release date.

But there is a lot to play for here for the Government. The world is going well, our trade partners are going well, and feeding into this equation going forward is a falling dollar which should be helping our exporters.

And with all of that, if we can only muster half a point a quarter, then this Government is facing some real issues, and has some real questions to answer over direction.