One in four Australians, 25.1 per cent, are finding it difficult to get by on their current income, new analysis from The Australian National University (ANU) shows. This is the highest percentage of financial stress among Australians during the COVID-19 pandemic and almost as high as pre-pandemic levels.
According to the IMF, the worst is yet to come, and “for many people 2023 will feel like a recession”. The IMF has also downgraded its expectations for Australia's economy, tipping it to grow by 1.9% through 2023, with inflation to average 4.8% next year.
Economic Outlook Note - Australia
Real GDP is projected to grow by 4% in 2022, 1.9% in 2023 and 1.6% in 2024. Elevated inflation is eroding households' purchasing power and has prompted the Reserve Bank of Australia to raise interest rates at a rapid pace.
The Australian Economy - June quarter 2022. The Australian economy grew 0.9% during the June quarter 2022, and 3.6% over the past year. Strength came from household consumption, which grew 2.2%, and exports.
Australia is a highly developed country with a mixed-market economy. As of 2022, Australia was the 14th-largest national economy by nominal GDP (Gross Domestic Product), the 20th-largest by PPP-adjusted GDP, and was the 22nd-largest goods exporter and 24th-largest goods importer.
On a mean wealth basis, Australia was the fourth-richest country in 2021 behind Switzerland, the US and Hong Kong. The average Australian adult was worth $US550,110 at the end of last year, after enjoying a $US66,350 annual increase in wealth.
Australia is now home to 2.2 million millionaires, according to a new study. Half of all Australians in 2021 had more than $400,000 in wealth. It means we have the highest median wealth of all the countries studied.
“Tasmania has quickly returned to the top of the economic leader board, courtesy of consistently high rankings for the eight economic indicators,” Mr James said. “Queensland is also a stand-out – its best overall ranking. And the ACT impressively leads the economic rankings on three of the eight economic indicators.
Collating numbers released in the IMF's quarterly update on foreign exchange reserves, RBC's Sydney-based fixed income strategist Michael Turner said it appeared China held around $130 billion of the $730 billion Australian Government and quasi-government bonds in the market.
We Expect an Earnings Recession in 2023
Our base case for 2023 is that Australia is likely to experience an earnings recession even if we do not suffer an economic recession. The reality is that the starting point for earnings is at a historically very high level.
It began with the pandemic
Two years ago, early in the pandemic, Australia went into recession for the first time in 30 years. And what an unusual recession it was.
Political stability index (-2.5 weak; 2.5 strong)
The latest value from 2021 is 0.85 points. For comparison, the world average in 2021 based on 194 countries is -0.07 points. See the global rankings for that indicator or use the country comparator to compare trends over time.
Australia will enter a recession next year, German investment firm Deutsche Bank is predicting, following a forecast spike in unemployment. The bank's dire warning is based on a 1 percentage point increase in the unemployment rate, rather than the 'technical' definition of a recession.
A recession would result in sweeping job losses, causing a major slowdown in economic activity, he said. Higher unemployment would amplify cost of living rises, spiking rents and mortgage repayments and looming increases to energy bills.
Australia in 2025 will be: strong, prosperous, healthy and secure and positioned to benefit all Australians in a rapidly changing world. We are told that Australia will need a diverse economy built on sustainable productivity growth, knowledge-based industries and high value goods and services.
In Australia, and in countries around the world, government economic support packages in response to the COVID-19 pandemic have led to large increases in government debt, continuing a trend of increasing government debt since the global financial crisis (GFC).
China is Australia's largest two-way trading partner in goods and services, accounting for nearly one third (31 per cent) of our trade with the world.
Total state debt across the six states is set to reach $688 billion (27% of GSP) by 2025-26, led by Victoria ($226 billion) and NSW ($221 billion).
Australia has plentiful supplies of natural resources, including the second largest accessible reserves of iron ore in the world, the fifth largest reserves of coal and significant gas resources.
Deutsche Bank forecasts Australia will enter a recession in 2023, following an expected rise in unemployment. If investment firm Deutsche Bank's forecasts hold true, Australia will enter a recession next year.
According to the United Nations, Australia is the second-best country in the world to live, due to its excellent quality of life index. The UN establishes a qualification, also known as the Human Development Index, based on an annual survey of social progress and economic indexes of the 187 countries.