A leading economist is now warning that Australia is about to fall into a shallow recession as businesses go bust at the highest rate in 7 years.

The opposition is heaping blame on the Albanese government claiming it is distracted by the Voice debate.

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Australia should brace for a shallow recession, warns leading economist Stephen Koukoulas. In a recent interview with 7NEWS, Koukoulas expressed his concerns about the state of the Australian economy, citing a combination of global and domestic factors that could potentially lead to a period of economic downturn.

According to Koukoulas, the ongoing trade tensions between the United States and China, two of Australia’s largest trading partners, could have a significant impact on the country’s economy. The uncertainty surrounding these trade relations has already caused fluctuations in the global market and could potentially lead to decreased export opportunities for Australia.

Furthermore, Koukoulas pointed to domestic factors such as the housing market and household debt as potential contributors to a recession. He noted that the cooling of the housing market, coupled with high levels of household debt, could lead to decreased consumer spending and investment, which are crucial components of a healthy economy.

In light of these concerns, Koukoulas stressed the importance of being proactive in preparing for a potential recession. He urged policymakers to consider implementing measures to stimulate the economy and support businesses and consumers during a period of economic downturn.

This warning comes at a time when Australia is already facing economic challenges, including sluggish wage growth, high levels of household debt, and ongoing concerns about the housing market. The Reserve Bank of Australia has already implemented interest rate cuts in an effort to stimulate the economy, but Koukoulas suggested that further action may be necessary to mitigate the impact of global and domestic economic pressures.

While the prospect of a recession may be concerning, Koukoulas emphasized that it is important for Australia to be realistic about the current economic climate and take proactive steps to address potential challenges. By acknowledging the potential for a shallow recession and taking appropriate measures to support the economy, Australia can better position itself to weather economic uncertainties and emerge stronger in the long run.

As the situation continues to unfold, it will be important for both policymakers and the public to stay informed about the state of the economy and remain vigilant in addressing potential challenges. By working together to address economic concerns, Australia can mitigate the impact of a potential recession and lay the groundwork for a stronger and more resilient economy in the future.