We wouldn’t rule it out completely, but it is looking less likely that Australia fell into its first recession since 1991 at the end of last year. However, a sustained period of stronger growth is not on the cards either. Instead, 2017 will probably be another year when Australia underachieves. The risk of a recession, which is usually defined as two consecutive quarters of falling output, is high simply because real GDP fell by 0.5% q/q in the third quarter of last year. The general assumption is that Australia will soon notch up 25 years without a recession as GDP probably rebounded in the fourth quarter.
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