Deloitte Access Economics has warned that Australia is on the verge of a “deep per capita recession” on the back of the Reserve Bank of Australia’s (RBA) aggressive interest rate hikes.
The Australian economy will eke out positive growth due to record immigration-driven population growth.
However, Stephen Smith, Deloitte Partner and primary author of the outlook study, warned that Australia’s “prosperity has stalled”.
“A deep per capita recession is expected over the next two years”, Smith said.
The report forecasts Australia’s economy to grow by less than 1% in the 2023-24 financial year, versus forecast population growth of 1.7%.
GDP will not return to its long-term trend of 2.4% until FY26-27, according to Deloitte.
Recent forecasts by Ratings agency S&P Global also projected a two-year per capita recession for Australia.
S&P projected that Australia’s GDP will only grow by 1.4% in 2023 and then only 1.2% in 2024.
In turn, Australia will be the fifth weakest growing economy this year and the second weakest economy in 2024.
The May federal Budget forecast that Australia’s population would grow by 1.9% in 2023 and by 1.6% in 2024:
Source: 2023 federal budget
As a result, Australians will suffer two consecutive yearly contractions in per capita GDP of 0.5% and 0.4% respectively.
The only thing preventing Australia from entering a ‘technical recession’ is the Albanese Government’s record immigration program.
Quantitative peopling has yet again ‘saved’ the Australian economy, at least in aggregate terms.
However, everyone’s share of the economic pie is falling, while Australia’s predicted 917,000 population rise over 2023 and 2024 will crush-load everything in sight and wreck living standards.
