More than 60 per cent of Australians believe the nation is heading for a recession by Christmas, according to new research from comparison site Finder, as high inflation and low productivity continue to strain households.
The survey, shared exclusively with SkyNews.com.au, revealed that 48 per cent of Australians think a recession is likely by the end of the year, while a further 16 per cent believe it is certain. Only three per cent expressed certainty that Australia would avoid a recession.
The findings come as the Australian Bureau of Statistics reported that Australia's GDP slowed to 0.3 per cent in the March quarter, and productivity—measured by GDP per hour worked—declined by 0.6 per cent. Lower productivity adds to inflationary pressures, which could force the Reserve Bank of Australia (RBA) to raise interest rates further, potentially pushing up unemployment.
Sarah Megginson, personal finance expert at Finder, said economic anxiety is weighing heavily on households. “Households across the country are under intense financial pressure, and many Australians fear the economy could get significantly worse before it gets better,” she said. “While a recession isn’t guaranteed, the fact that so many Australians expect one shows confidence in the economy is fragile.”
The survey also found that 18 per cent of respondents considered a recession unlikely, and 15 per cent were unsure. Ms Megginson stressed that even the possibility of a recession is already affecting consumer behaviour. “Even the possibility of a recession can change consumer behaviour, with families becoming more cautious about spending and taking on new debt,” she said. “Economic uncertainty is scary, but taking small proactive steps now can help you feel more prepared no matter what happens next.”
Recession fears have intensified as inflation and unemployment have risen in recent months. The RBA has delivered three consecutive rate increases since the start of the year, driven by factors including large government spending, low productivity, a rebound in the private sector, and the global oil crisis. RBA Governor Michele Bullock warned earlier this year that the central bank is alert to recession risks, particularly amid rising fuel prices. “It's still possible if the Middle East conflict resolves that everything will turn out okay,” she said in March. “Having said that, the board is alert to risks of recession and if circumstances change and if it does look like the world economy is in big trouble... then that will have different implications for inflation. We will be looking very hard at what we need to do in those circumstances.”
