Major Australian bank economists have reduced their real GDP projections down to 1% by mid-next year amid mounting international and domestic pressures. Surging Brent crude oil above $US110 a barrel and diminishing housing wealth are squeezing household budgets across the country. Restoring price stability may also require the national unemployment rate to climb from 4.7% up to 5.4% by late next year. Furthermore, the likelihood of a full economic contraction has now risen to roughly 45%.
Key points
Brent crude oil prices climbing above $US110 a barrel due to Middle East conflict are exa…: Brent crude oil prices climbing above $US110 a barrel due to Middle East conflict are exacerbating the domestic growth slowdown.
National Australia Bank warns that the unemployment rate could increase from 4.7% to 5.4%…: National Australia Bank warns that the unemployment rate could increase from 4.7% to 5.4% to successfully restore price stability.
AMP chief economist Shane Oliver warned that the chance of an economic recession has clim…: AMP chief economist Shane Oliver warned that the chance of an economic recession has climbed as high as 45%.
Sources checked by our analysis pipeline: 1
Australia’s economy is set for a “sharper, longer slowdown”, major bank economists say, as the Reserve Bank is forced to keep interest rates higher to rid the nation of persistent inflationary pressures.
The RBA is widely expected to hit mortgage holders with a fifth rate hike on Tuesday, in a move that will push the cash rate to its highest since 2008 amid rising worries the economy could even be tipped into recession.
Belinda Allen, the head of Australian economics at CBA, said the extended Middle East conflict, collapsing house prices and a more aggressive central bank would drive real GDP down to just 1% by the middle of next year, nearly half the previous estimate of 1.8%.
Growth through 2027 would be barely stronger at an estimated 1.1%, according to the updated projections.
Allen said she had expected to see “signs of economic recovery” by the New Year, but now sees the economy “bottoming deeper and later”.
This more pessimistic outlook was “mainly given oil has been a lot higher than we had been expecting,” she said.
Investor scrutiny has intensified as the cybersecurity firm faces immediate market pressure during today's trading session. Shares of Check Point Software are recording a sharp downturn as market participants assess the situation. Unresolved questions have begun to emerge regarding the sudden drop in the company's valuation.
A family dispute has emerged following a parent's death, centering on financial contributions made for a major life event. The widow is seeking to recover tens of thousands of dollars originally provided to her stepchild, leaving the recipient uncertain of their responsibilities. This sudden post-funeral demand places the surviving family member in a difficult personal dilemma over returning the funds.
Investors are watching whether the wider financial landscape can absorb significant losses from a dominant technology segment. A retreat in this high-performing sector introduces uncertainty over macroeconomic momentum. Observers are evaluating whether overall equity strength can persist despite these emerging sector-specific headwinds.