{"id":757971,"date":"2026-06-24T21:42:20","date_gmt":"2026-06-24T21:42:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/757971\/"},"modified":"2026-06-24T21:42:20","modified_gmt":"2026-06-24T21:42:20","slug":"australians-are-bracing-for-a-recession-is-one-coming","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/757971\/","title":{"rendered":"Australians are bracing for a recession. Is one coming?"},"content":{"rendered":"

As property prices tumble and retailers shut up shop, Australians are fearing that the nation is on the verge of another GFC-style event – but economists say most of the pain will be felt at home rather than the nation\u2019s balance sheet.<\/p>\n

Amid weeks of bad financial news – from tumbling clearance rates to creeping unemployment – almost two out of three Australians<\/a> believe a recession this year is either \u201clikely\u201d or \u201ccertain\u201d.<\/p>\n

\"\"<\/p>\n

Amid a swath of bad news, Australians fear we are on the verge of another economic crisis.\u00a0Polly Hanning<\/p>\n

But experts share a different view. They say that while the nation\u2019s balance sheet will probably avoid a technical recession, household budgets will continue to be under immense strain.<\/p>\n

\u201cA June quarter contraction is a risk, with the full weight of the rate rises and peak fuel prices landing together,\u201d Adjunct Associate Professor at Griffith Business School, Graeme Hughes, told nine.com.au<\/a>.<\/p>\n

\u201cBy the textbook, Australia is not in recession – the economy still eked out 0.3 per cent growth in the March quarter.<\/p>\n

\u201cBut the textbook measures the nation, not the household. Counted per person, the economy has been sliding backwards for a while now.\u201d<\/p>\n

This means Australians\u2019 bills are going up faster than their pay packets.<\/p>\n

\"An<\/p>\n

An attempt to save popular Australian retailer Barbeques Galore has failed.\u00a0Supplied<\/p>\n

\u201cThe grocery run that came to about $1000 in 2019 is closer to $1250 now,\u201d Hughes said.<\/p>\n

\u201cPower (is) more than 22 per cent dearer than a year ago since the rebates lapsed and petrol is still carrying the bruise of the Middle East oil shock.<\/p>\n

\u201cWhen the pay packet shrinks, the order of business never changes: the mortgage gets paid, the lights stay on, and almost everything else is cut loose.\u201d<\/p>\n

It\u2019s these cut backs in discretionary spending playing out across Australia that Hughes believes is at least in part to blame for recent retail closures such as Glue, Lincraft and Barbeques Galore.<\/p>\n

AMP\u2019s deputy chief economist Diana Mousina took a more optimistic view.<\/p>\n

\u201cI don\u2019t think that we are going to go into a negative quarterly growth rate,\u201d she told nine.com.au<\/a>.\u00a0<\/p>\n

\u201cIt might be a bit soft, but it\u2019s unlikely to be negative.\u201d<\/p>\n

In fact, Mousina maintained that despite consumers cutting back on discretionary spending, Australia\u2019s economy \u201cis still doing okay\u201d, buoyed up by strong export growth, government spending and certain business sectors.<\/p>\n

\u201cWe are in a period where interest rates have been increased, so we are going to see some slowing in consumption, but we are not expecting the consumer to fall off a cliff.\u201d<\/p>\n

According to the most common definition used by economists, a recession occurs when a country\u2019s gross domestic product (GDP) falls into the negative for two quarters in a row.<\/p>\n

In effect, this means the total monetary value of a nation shrinks over at least a six-month period.<\/p>\n

The last time this happened in Australia was during the COVID-19 pandemic in 2020, but the impact was cushioned by government expenditure, and recovery was swift.<\/p>\n

Before that, Australia had not had a true recession since 1991.<\/p>\n

Then, Australia\u2019s GDP fell by 1.7 per cent and the unemployment rate soared to 11 percent.<\/p>\n

Mousina noted that while unemployment rose in April to 4.5 per cent, it remained at a relatively low level by historical standards.<\/p>\n

\u201cThe unemployment rate has risen by about one per cent from its COVID low – but that was a really abnormal level of unemployment,\u201d she said.<\/p>\n

She also acknowledged that middle-income earners weren\u2019t seeing their pay packets grow – something that economists were seeing play out globally.<\/p>\n

\u201cHigh-income households still continue to enjoy pretty good income growth and low-income households are being supported by the government, but the middle-income group is being hollowed out a bit,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"As property prices tumble and retailers shut up shop, Australians are fearing that the nation is on the…\n","protected":false},"author":2,"featured_media":757972,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-757971","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/757971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=757971"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/757971\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/757972"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=757971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=757971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=757971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}