The worst bushfires to ravage Australia in living memory could push the economy into a recession for the first in almost three decades, experts fear.
More than 6million hectares of bushland has already burnt, threatening homes and lives and putting residents on edge, particularly in New South Wales and Victoria.
Before the infernos intensified retail sales were already struggling with cash register activity during the past financial year posting the weakest annual growth since the 1991 recession.
The worst bushfires to ravage Australia in living memory could push the economy into a recession for the first in almost three decades, experts fear (pictured is a father holding his daughter as flames threaten the town of Mallacoota in eastern Victoria)
Digital Finance Analytics principal Martin North, an economist, said the bushfires could be enough to tip Australia into a technical recession.
'It's increased the probability of a recession now relative to where we were before,' he told Daily Mail Australia on Monday.
'It was already looking pretty weak in terms of where our local economy was going.'
AMP Capital chief executive Shane Oliver said TV and social media images of the devastation were likely to hurt consumer confidence - even in cities untouched by the blazes.
'The real impact will come for the economy in terms of city dwellers feeling less inclined to spend because of the negative news about the bushfires,' he said.
Dr Oliver said a continuation of weak consumer spending in 2020 could be enough to cause a recession.
More than 6million hectares of bushland has already burnt, threatening homes and lives and putting residents on edge, particularly in New South Wales and Victoria (pictured is Jesse Collins organising donations at an evacuation centre at Cobargo on the NSW South Coast)
'If it's sustained, it could, that's a risk,' he said.
Australia's economy grew by a much slower-than-average 1.7 per cent in the year to September.
Dr Oliver predicted the bushfires could knock up to one percentage point off Australia's annual gross domestic product in the December and March quarters.
Australian wages have also been growing at weaker-than-average levels since 2013, further constraining the ability of consumers to spend.
Mr North said before the bushfires, he saw the Australian economy 'teetering on but not necessarily going into recession'.
He feared the natural disasters had heightened the risk of a recession, with the blazes and the drought likely to affect agricultural production.
Even before the infernos intensified, retail sales were already struggling with cash register activity during the past financial year posting the weakest annual growth since the 1991 recession (pictured is a woman shopping in Sydney on Christmas Eve, 2019)
Up until the 1991 recession, Australia had suffered an economic contraction several times a decade, on average.
A prolonged recession that began in September 1982 lasted a year, during a period of prolonged drought and the devastating Ash Wednesday bushfires in Victoria and South Australia. That followed another recession in 1981.
Another recession also occurred in 1977, during an era of widespread strikes.
The economy also took a beating in the final two quarters of 1975, when Governor-General