Australia’s prospects of entering a recession have decreased as the Reserve Bank’s decision to stop an 11-month cycle of tightening monetary policy has helped the country’s economic outlook.
According to a survey of 17 economists conducted and released on Wednesday. The median forecast for a downturn is now 35 percent, down from 40 percent last month. A 35% possibility was anticipate by responders from AMP Capital Markets & the Commonwealth Bank of Australia.
Nomura Holdings (NYSE:NMR) Inc., Barrenjoey Market Pty Ltd. And Credit Suisse Group AG estimate the risk to be 60% at the high end of the range. ANZ Group Holdings Ltd., Goldman Sachs Group Inc. (NYSE:GS), and Westpac Banking (NYSE:WBK) Corp. did not take part.
The RBA held borrowing costs constant this month, following ten straight increases that raised the cash rates to 3.6 percent from 0.1% in May. It is attempting to make a gentle landings in the A$2.2 trillion ($1.5 trillion) economics by attacking inflation more gingerly than some of its overseas counterparts.
Australia’s cautious stance is helping the local housing markets which is seeing signs of stabilising after year of falls. Consumer sentiment improved in April following the RBA’s pause, with market pricing in Australia’s end to rate hikes.
Bloomberg survey says, experts estimate one additional increase for a final rate of 3.85%.
According to AMP’s Shane Oliver, Australia is likely to avoid recession “due to strong business investments, Chinese reopening, and provided the RBA soon stops hiking.” “However, economic growth will remain sluggish this year.”
A recession is defined as 2 consecutive quarters of falling GDP.