Aussie recession no risk. Falling living standards certain


This is all kinds of wrong:

The next six months could prove make-or-break for the economy, leading economists warn, as ­stalling growth in early 2024 risks tipping the nation into recession.

AMP chief economist Shane Oliver said the “big issue” for the year ahead was how severely the economy would slow, warning we may have become too complacent about the risks ahead.

“It’s hard to believe we’d have the biggest interest rate tightening cycle since the 1980s with only a minor impact on the economy, which is what we’ve had so far,” Dr Oliver said.

At MB, we like Shane Oliver, so this is not to have a go at him.

But the framing of this is misleading.

It is not remotely surprising that Australia has not had a recession. If you stuff more than 600,000 people into the economy in a year, that’s 2.4% GDP growth before you start.

But what matters is GDP per capita, which has been in recession for a year.


In fact, GDP per capita has not grown in two years, the worst performance since 1990. Worse than the GFC and the Great Deflation:

Real per capita GDP

Source: Alex joiner


And while that stall has taken place, real net disposable income has been falling at the fastest pace since the mining crash despite record highs in commodity prices. Once they break, incomes will fall even faster

This is a broken economic structure that feeds growth to the beneficiaries of mass immigration and holes in the ground while the overwhelming majority of Australians go backwards:

Real household disposable income per capita

To describe it as resilient is beyond absurd.

It is gaslighting.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.