Kiwibank chief economist Jarrod Kerr says future positive for regions like Whanganui

Kiwibank chief economist Jarrod Kerr is "feeling better about this part of the world" after a visit to Whanganui.

Kerr, who recently returned to New Zealand after spending his career to date overseas, was in Whanganui on Wednesday, June 27 and met with groups including accountants and the Whanganui Chamber of Commerce.

Kerr said there seemed to be a positive vibe in the regions.

"The feedback has been really good in Whanganui and Hawke's Bay. I'm walking away feeling a bit better about this part of the world.

"People say a recession is coming for whatever reason but I don't see that. Since [the global financial crisis] 2008 we have been scared to have a positive story because we've been disappointed for so long.

"I see no reason we can't have a positive story."

Kerr said he was taking an international view and looking at New Zealand with a different lens.

"We're looking at what's happening offshore and how that's fuelling New Zealand's outlook for the better. We have our problems, particularly in the near term, but the outlook for our economy is quite good.

"That's because we are now part of probably the most exciting section of the world. We used to report back to the mothership in the UK but now we look to Asia which is growing faster.

"We're trying to raise awareness that India will be the next superpower. A lot of people can't see it at the moment but you could have said the same about China 15 or 20 years ago.

"India is a colony like we are, they speak English and there are a lot of similarities in culture. I think they will be an easier trading partner for us. That doesn't surprise a lot of people in regions like Whanganui who have been dealing with India for a long time."

Spikes in house prices and lack of rental properties in places like Whanganui were comparatively good problems to have, Kerr said.

"They can be overcome. The Auckland housing market went hell for leather but it's slowing down and we're seeing it in places like Hawke's Bay and Whanganui where things have improved a lot recently.

"People are moving out of Auckland to other areas though it's taken longer than a lot of people thought for other centres to start to grow.

"There's also the migration boom with Kiwis not leaving, Kiwis coming home like I have and we're attracting people from Asia coming down here for a better life. All this means an increase in demand for houses."

Raising the minimum wage was a step toward a better outlook, Kerr said.

"It's something companies are going to have to deal with. It's not the answer but it's a firestarter to getting wages moving in the right direction."

Many people Kerr met raised concerns about US President Donald Trump.

"The concern over Trump is justified in terms of the way he speaks and acts but a lot of it is hot air. He's a Republican so he's pro-business. He's cut taxes, increased spending and is attacking competitors to the US's companies. It's fuelled the US equity market.

"But when he's talking about hitting the nuclear button, and he does talk about it, it gets people nervous in the markets. The risk is that he oversteps not just China but Germany and anyone else. It seems to be the US against everyone whereas in the 1930s it was everyone against everyone which led to a war."

Although agricultural economics was not his area of expertise, Kerr said he believed the approach to dealing with cattle disease M. Bovis was the right one.

"I think I like the idea of ripping the band aid off and trying to eradicate it rather than having it here. It would have an impact on our ability to produce. It's a bit of an unknown and it's hard to quantify but it's not good to have."