Sky News contributor Steve Price believes Australia is heading down the road towards a recession with inflation still high in the country.
“This seems to have all developed really quickly in the last month or so,” Mr Price told Sky News host Sharri Markson.
“You’re starting to hear a lot of evidence of people with six figures salaries … doing it really hard.
“We are, I think, heading down the road to a recession and it just feels like it now may be inevitable.”…(read more)
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‘We are heading down the road to a recession’: Concerns over Australia’s economic future
Australia, once celebrated for its robust economy and uninterrupted growth, is now grappling with the uncomfortable reality that it may be heading towards a recession. As the world deals with the ongoing COVID-19 pandemic, the Australian economy has been significantly impacted, leaving many economists and experts worried about the nation’s economic future.
The COVID-19 pandemic has dealt a severe blow to Australia’s economy, with sectors such as tourism, hospitality, and retail being hit the hardest. The government’s necessary measures, like travel restrictions and social distancing, have caused a sudden halt in economic activity, leading to significant job losses and business closures. Despite aggressive fiscal and monetary policies to provide relief, the impact has been substantial, and concerns are growing over a prolonged recession.
One major concern is the declining consumer spending, which is the primary driver of Australia’s economic growth. With record-breaking levels of unemployment and underemployment, households are tightening their budgets, reducing their discretionary spending, and being more cautious with their finances. This has severe consequences for businesses that rely on consumer demand, resulting in further job losses and business closures.
Another area of concern is Australia’s heavy reliance on international trade. As the pandemic continues to affect economies around the world, international trade has been severely disrupted. Australia heavily relies on Chinese demand for its exports, mainly in the resource and agricultural sectors. However, diplomatic tensions between the two countries, coupled with the global economic slowdown, have resulted in reduced demand and lower prices for Australian exports. This has a detrimental impact on the country’s export-led growth and threatens its economic stability.
Furthermore, the decline in immigration and international students puts additional strain on the economy. Australia has experienced steady population growth over the years, largely driven by skilled migration and international students. The restrictions on international travel have led to a significant decline in migration, affecting population growth, labor market dynamics, and the education sector. These factors further amplify the concerns over the potential for a recession.
The Australian government recognizes the severity of the situation and has introduced multiple stimulus packages aimed at supporting businesses, saving jobs, and boosting consumer spending. However, the effectiveness of these measures remains to be seen, as uncertainties surrounding the course of the pandemic persist.
There are glimmers of hope, though. The government’s success in managing the health crisis has led to a gradual reopening of the economy. Some sectors are starting to recover, and consumer confidence is slowly improving. Additionally, the Reserve Bank of Australia has implemented historically low interest rates, essentially encouraging borrowing and investment.
To navigate through these challenging times, Australia needs to identify and invest in new growth industries, focusing on diversification to reduce its reliance on sectors vulnerable to global shocks. This includes investing in renewable energy, technology, and advanced manufacturing.
Ultimately, the road to economic recovery for Australia may be long and arduous. The nation must prepare for the possibility of a recession and take necessary steps to mitigate the impact. Effective policies, support for struggling industries, and a focus on innovation can help steer the country towards a more stable and prosperous future.
What i love is the politicians got a pay rise on their higher than the average pay. Then a $ 3000 hardship bonus to help with cost of living.
Ohhhhhh horror the children’s sports clubs cancelled. The insanity that we must endure.
Does anyone actually realize for the past 3 years borrowers got a huge discount on their mortgages? Do we not remember that part of this equation?
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Easy fix, just redefine recession. Worked in America. China eliminated poverty by redefining poverty. It worked when we redefined women, now men can dominate women's sport. In fact why dont we redefine death and suffering so we can live in a perfect communist utopia! Watch this space!
DONT WORRY OZZIES. USA AND UK WILL PAY PREMIUM PRICES FOR YOUR PRODUCTS. FORGET CHINSES MONEYY WHO SAVE YOU LAST GFC. REAP WHAT YOU SOW.
Labour doing what Labour Does best just blaming everyone else
Can someone explain to the rest of the overpopulated world how such a huge country with only 26 million people has a shortage of affordable housing, so many homeless and some of the highest property prices on earth? And why 40% of total population lives in only 2 cities? Stupid is as stupid does.
What's in common between the recession of the 90's and the recession Australia is facing today? You guessed it – Labor was in charge!
Surely they can break the wages promise like they did every other election promise
Its clear everone wants to call a recession so the RBA starts to cut interest rates. The RBA is not stupid. They will keep ratea high so we dont have another surge in inflation!
A crisis is coming
With this latest increase, after our homeloan repayments we should have just enough money to feed our toddler, so I guess that means there's more for us to give. Keep squeezing and we'll let you know when we can't put food on the table anymore.
With only a 0.2% growth in the march quarter its not looking good for the June quarter. On top of that Albo and his goon squad have taken up to $1500 from our tax returns! Labor truly are the six finger party!
Ben Roberts Smith could solve this problem in twenty four hours if he was president.
destroying consumer sentiment is the main culprit that will inluence the stakes in us moving towards recession.
and the measure you add to this will be the cumulative factor that will prolong this recession (if it comes to be)
There is never a good time for a wage rise, if the BCA had their way no one would have had a wage rise in 30 years.
The gov needs to warn business against increasing prices further or they will feel a deep recession through consumers closing their wallets.
The recession we have to have….
Aust. supposedly one of the richest country in the world UNTIL THE LABOR PARTY GOT TO IT. AND fked it up for the next 150 years. THANKS ALBO>
If you wish to live in your passive enslavement which it seems you do except for France that objects, you can sit in your negatively geared house (if you have one) pay a significant portion of your income for the privilege and rarely venture out the front door as it inevitably will cost money.
You are happy with this as you have not known any different in your life time (oldies can tell you of better times).
Governments cannot change the financial pressure you are under or possibly wish to, but a time is coming whether it be war or revolution people will want their freedom back that government has insidiously eroded.
Passive enslavement in our current evolution of democracy is a necessity to support a top heavy government through taxes that do not filter back to the people but support this ever growing cancer.
In previous posts I have identified some specific points such as 45% tax on a new house, private enterprise making significant profits from gas, nursing homes,fuel, water and many other things that if managed properly could enhance the peoples lives.
So what? We had it coming! Do you think decades of low rates would have yielded any other result? The romance with housing in this country knows no bounds! They are still slapping each other on the back after "winning" another house auction. It depends who you are. many Australians have never been more comfortably off!
Ahhh….think we might have already arrived at our destination ….but this is, most definitely, just the beginning
Did I hear you say that's more Labor balderdash with a large serving of bunkum?
The only prices coming down are non essentials, all essentials are still going up with interest rates (mortgage, rents, energy, food, medical)
Size of Government out of control, Debt Federal States, household and foreign debt +$5 Trillion combined with rising interest rates. Only a PM Lyons, Australia's greatest PM ever, of the1930s with deep Austerity cuts can save Australia now. Lyons Won the 1931 election in a landslide with his new party and saved Australia from civil war. We were out of the depression by 1935 due his extremely business policies and saved from facist and communist extremism by this forgotten PM. Mr John Adams (economist) did a great presentation on the him in 2020. Lyons also earlier saved his home state of Tasmania as Treasurer.
All those free scamdemic tests not so free now eh!
Wait until the 25 percent electricity price increase hits. That will kick inflation big time. The government promise of lower electricity prices looks a bit rubbery to me!!! A one term government methinks.
It’s unavoidable thanks to and only the covid response..
labour , opps sorry the activists that run this country will pay , where paying now but they will pay in the long run, sacked , gone and close to jail terms , and it wouldn't surprise me if they cant walk a street in this country without security !!
Was that recession or Depression hahaha Join BRICS to avert a disaster
the recession started heading our way as soon as the incompetent Labor/Greens communists were elected to office.
Welcome to 2021. This was obvious two years ago.
Was that your goal Labor coz thats 0:46 what yout policies are doing
The most corrupt countries have 2 classes of people, the rich and the poor.
Carbon copy of the Keating era 17% interest rates.
We are in stagflation which is a death spiral for any government.