On Wednesday, the Australian Bureau of Statistics (ABS) released the Q2 national accounts, which revealed that real per capita GDP declined by six consecutive quarters and for seven of the past eight quarters:
Australia’s real per capita GDP is now 2.0% lower than it was when the Albanese government took office in June 2022.
The following chart compares the current per capita decline against prior downturns (excluding the pandemic lockdowns):
While the current decline in GDP per capita is modest compared to the 5.0% decline recorded in the 1970s recession and the 3.0% decline recorded in the early-1990s recession, it is the longest decline in modern history.
The story is far worse with respect to the decline in real per capita household disposable income.
Earlier this week, The AFR’s Michael Read reported that Australia had experienced the largest decline in per capita household income in the world over the two years to Q1 2024:
Wednesday’s national accounts revealed that real per capita household disposable income fell another 0.2% in Q2, down 8.2% from peak and tracking around March 2015 levels:
The following chart plots the declines in Australia’s real per capita household disposable income:
The current 8.2% decline from the Q2 2022 peak is unprecedented and dwarfs anything that has come before it during our lifetimes.
In terms of household incomes, the current recession is easily the worst in Australia’s modern history and is also one of the worst declines in the world.
