Monday 3 October 2022 08:51 PM Recession in Australia: How could you be affected? trends now
Australia could be plunged into chaos with spiralling unemployment and poverty if the nation goes into recession, leading economists have warned.
Last week, one of Australia's 'Big Four' banks said that continued aggressive interest rate hikes could tip Australia into a recession.
The RBA is expected to announce its sixth rate hike today, with a predicted 0.5 per cent rise.
This would take interest rates from a record low of 0.1 per cent from earlier in the year to a nine-year high of 2.85 per cent.
Some economists have even predicted that rates could go as high as 4.2 per cent by the middle of next year.
The deputy governor of the Reserve Bank of Australia warned the outlook for the global economy was not good, with economists saying that a recession is 'on the cards' for Australia.
If a recession does come to pass, then unemployment will rise rapidly, and poverty will 'absolutely' increase, Matt Grudnoff, Senior Economist and Director of the Economics Program at The Australia Institute told Daily Mail Australia.
Economist Ross Garnaut, a professor at the University of Melbourne, added that the recession cost would be 'very high' and send Aussies back to 'long term unemployment'.
Mr Grudnoff said it could take years for Australia to bounce back from the impact of a potential recession.
Economist Ross Garnaut, who is also a professor at the University of Melbourne, said that the cost of recession would be 'very high' and send Aussies back to 'long term unemployment'
If a recession does come to pass then unemployment will rise rapidly and poverty will 'absolutely' increase, Matt Grudnoff, Senior Economist and Director of the Economics Program at The Australia Institute said
'With the Covid-19 pandemic recession, there was a quick bounce back, but that was an unusual one.
'There's no guarantee of a bounce back if we go into an interest rate recession. Unemployment would rise rapidly and it would cause a snowball effect leading to even more people losing their jobs.
'The current recession has parallels to the 1991 recession, and it took 10 years for unemployment to recover to prior levels after that.'
He also said people would struggle to pay off their mortgage and the price of houses and rentals would fall as unemployment increases.
If things get really bad, the economist suggested that it could even lead to a rise in homelessness.
Mr Garnaut added: 'The costs of recession would be very high. People who have had a chance to enter employment in the stronger labour market conditions of the past year, and people like them, would be sent back to long-term unemployment.
'Australia would return to an even worse place than the Dog Days in the half
