AMP Chief Economist Shane Oliver says a sharp slowing in economic growth will cause a “very high” risk of Australia entering a recession by early 2024. “The risks are becoming increasingly skewed and every interest rate hike by the RBA increases that risk,” Mr Oliver told Sky News Australia....(read more)
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The risk of Australia entering a recession by next year is ‘very high' As the world grapples with the economic fallout of the ongoing global pandemic, many countries are experiencing severe economic downturns. Australia, known for its robust economy, is not immune to these risks. In fact, experts are warning that the risk of Australia entering a recession by next year is 'very high,' raising concerns about the nation's economic future. The Covid-19 pandemic has inflicted immense damage on Australia's economy, causing a significant slowdown in various sectors. Social distancing measures, lockdowns, and travel restrictions have crippled industries such as tourism, hospitality, retail, and even construction. These sectors, which used to be major contributors to the country's growth, have experienced massive declines in revenue and employment. Moreover, Australia's heavily reliance on international trade has also become a major drawback during these uncertain times. Countries across the globe are implementing protectionist policies, disrupting supply chains and hindering foreign investments. The restrictive measures taken by major trading partners have directly impacted Australia's exports, leading to a significant reduction in the demand for its commodities, particularly in areas such as mining and agriculture. Unemployment has surged to record levels in the country, with many individuals and businesses struggling to make ends meet. The government's job support measures, such as the JobKeeper payment and the increased JobSeeker allowance, have provided some relief, but they alone cannot ensure a strong economic recovery. With a decrease in consumer spending and business investment, the overall economic activity remains subdued. Another crucial factor impacting Australia's economic health is the collapse of the international education sector. A significant number of international students, who used to contribute billions of dollars to the Australian economy annually, are now unable to travel to the country due to travel restrictions. This situation has inflicted a severe blow to the education sector, which has a ripple effect on various associated industries such as accommodation, retail, and hospitality. The Reserve Bank of Australia (RBA) has been attempting to stimulate the economy and mitigate the economic risks. It has slashed the official interest rates to record lows and provided liquidity to the banking sector. The government has also introduced stimulus packages and infrastructure spending initiatives to kickstart the economy. However, these measures might not be sufficient to prevent a recession given the unprecedented scale of this crisis. Furthermore, the effectiveness of government and central bank measures hinges on the successful containment of the virus. If there is a resurgence in Covid-19 cases and subsequent lockdowns, it would further exacerbate the economic downturn. The fear of a possible second wave of infections looms large, adding to the uncertainty surrounding Australia's economic recovery prospects. To mitigate the risks, the government and policy-makers should consider adopting multi-pronged strategies. These strategies could involve diversification of the economy by investing in technology, innovation, and renewable energy sectors. The promotion of domestic tourism, reduced reliance on international markets, and the development of stronger manufacturing capabilities could also aid in minimizing the risk of a recession. While the immediate future looks challenging for Australia, there is hope that the country can overcome these obstacles and navigate its way out of a potential recession. A cohesive and coordinated effort involving both government and the private sector will be crucial in reviving the economy and safeguarding the livelihoods of Australians. However, until the global pandemic is under control, the risk of a recession remains 'very high.' https://inflationprotection.org/very-high-chance-of-australia-entering-a-recession-by-next-year-experts-warn/?feed_id=113870&_unique_id=64a35dad6a823 #Inflation #Retirement #GoldIRA #Wealth #Investing #6330148818112 #business #fb #Finance #msn #yt #RecessionNews #6330148818112 #business #fb #Finance #msn #yt
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