The 0.5% q/q fall in GDP in the third quarter and the weak tone of October’s international trade data have raised the chances that Australia will experience its first recession in 25 years. We wouldn’t completely rule out the possibility of a second consecutive quarter of falling output in the fourth quarter, but our current forecast is that GDP grew by 0.3% q/q. In any case, a recession at this stage would probably be short and shallow and is unlikely to lead to a surge in unemployment. There’s no escaping the fact, though, that the outlook has weakened.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services