After eight consecutive rate rises this year, the Reserve Bank will spend the next few weeks assessing the impact on inflation. The risk is that the rate hikes could push us into a recession.
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But as Alan Kohler explains, most economists think that Australia will avoid the plunge, and the reasons may surprise you.

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Most economists think Australia will avoid a recession. The reasons may surprise you

In recent months, there has been much speculation about the possibility of Australia entering into a recession. With a slowing economy and global trade tensions, many experts have been forecasting a downturn in the country’s economic growth. However, the majority of economists now believe that Australia will avoid a recession, and the reasons for this may surprise you.

One of the main reasons for this optimism is the resilience of the Australian economy. Despite facing challenges such as the US-China trade war and a slowdown in the housing market, Australia’s economy has shown remarkable strength. The country has continued to see solid employment growth, with the unemployment rate remaining low at 5.2%. Additionally, consumer spending has remained relatively stable, providing a strong foundation for economic growth.

Another factor contributing to the belief that Australia will avoid a recession is the positive outlook for the global economy. While there have been concerns about a potential global recession, many economists believe that the risk of a major downturn is not as significant as previously thought. This has been supported by recent developments in trade negotiations between the US and China, as well as signs of a potential resolution to the Brexit deadlock.

Furthermore, the Australian government has taken proactive measures to stimulate the economy. In recent months, the Reserve Bank of Australia has cut interest rates to record lows, providing additional support to businesses and households. The government has also introduced infrastructure spending measures and tax cuts to boost economic activity.

Despite these positive indicators, there are still some risks that could potentially impact the Australian economy. One of the main concerns is the uncertainty surrounding the US-China trade war, which continues to create volatility in global markets. Additionally, the ongoing slowdown in the housing market is a cause for concern, as it has the potential to affect consumer confidence and spending.

Overall, most economists remain cautiously optimistic about Australia’s economic prospects. While there are challenges and uncertainties to navigate, the country’s resilience and proactive measures taken by the government provide a strong foundation for continued economic growth. However, it is important for policymakers and businesses to remain vigilant and adaptable to potential risks in the future.

In conclusion, the prevailing view among economists is that Australia will avoid a recession, despite the challenges it faces. This positive outlook is supported by the resilience of the Australian economy, the positive global economic outlook, and the proactive measures taken by the government. While risks remain, there is cause for optimism about the country’s economic future.