Economist Sophie Photios estimates 50 percent chance of recession for 2024

·

Along with other Macquarie economists, Sophie Photios estimates there is a 50 percent chance of recession this year as the “trap” of high migration unwinds and high interest rates leave the private sector in “stagnation”.

According to AFR, Photios claims strong net migration of more than half a million people over the past year had also added to inflation pressure including rents.

Photios also describes the economy as a “masquerade”, where the “surge in immigration” has masked the gap between the economy growing modestly in total but going backwards in per-person terms.

“Population is at the centre of the Australian story as it is working on growth in a ‘positive’ way and on inflation in a ‘negative’ way – and has offset the impact of combined policy tightening,” Photios said in a joint report with colleague Graham McDevitt.

Immigration is shaping as a key electoral battleground – again. Louise Kennerley
Immigration is shaping as a key electoral battleground – again. Photo: Louise Kennerley/AFR.

“Australia’s migration pulse is expected to taper off in 2024, and when this happens, it does not appear that households, business, or trade will be able to fill the growth void”.

The Macquarie report was published last month prior to the federal budget and Opposition Leader Peter Dutton’s plan to cut migration.

In addition, Photios and McDevitt stress that “If population growth slows, then aggregate growth slows, and if there is no other driver of growth, the economy is at risk of recession.”

Macquarie economists expect an interest rate cut in the second half of 2024 after an “extended RBA pause”, as inflation’s slower economic growth and a moderation will give the central bank space to reduce financial pressure on Australian households.

Source: AFR

Advertisement

Share:

KEEP UP TO DATE WITH TGH

By subscribing you accept our Terms of Service and Privacy Policy.

Advertisement

Latest News

From crisis to compassion: Timos Roussos and his family’s mercy mission in war-torn Cyprus

When Turkish troops landed on Cyprus on 20 July 1974, six-year-old Timos Roussos was sitting on the floor of his family’s home in Lemesos.

A granddaughter returns: Georgia Georgiou retraces her yiayia’s occupied village in Cyprus

When Georgia Georgiou handed over her Cypriot ID at the border checkpoint to cross into occupied northern Cyprus, she felt an ache.

‘You never get over it’: A childhood shattered by the Turkish invasion of Cyprus

On a warm July morning in 1974, 10-year-old Anastasia Di Loreto (née Karatzia) was jolted awake by the sound of bombs falling on Kyrenia.

Cyprus: The paradox of tolerance and impunity for Turkey

The lack of a unified, systematic and practical strategy on the part of Greece has led the Cyprus crisis into national disarray.

Lost homes and lingering hope: Greek-Cypriots reflect on Turkish invasion and its aftermath

From hidden stories to haunting memories, two Greek-Cypriot men share what it means to carry the burden of Cyprus’ past.

You May Also Like

Tom Adronas awarded life membership of the Melbourne University Baseball Club

The Melbourne University Baseball Club (MUBC) has recently awarded Greek Australian Tom Andronas a life membership.

Jon Adgemis’ pub group to be restructured after securing refinancing

The Public Hospitality Group led by Jon Adgemis will overhaul its management after finalising its refinancing deal.

Traditional Greek Recipes: Delicious mezze platter

This Greek mezedes dish is a quick-and-easy meal that has something for everyone, such as meat, veggies, pita bread and great dips.