Treasurer Jim Chalmers says neither his department nor the Reserve Bank are forecasting a recession for Australia.
A number of economists have suggested lower house prices, a drop-off in dwelling investment and a range of global pressures will bring the economy close to recession in 2023.
Dr Chalmers says the economy is growing despite a number of challenges.
“Neither the Treasury nor the Reserve Bank is forecasting a recession in Australia,” he told reporters in Canberra on Tuesday.
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“I am confident in the long-term prospects for the Australian economy so long as we do our best to manage the … difficult combination of circumstances that we’re dealing with now.”
He noted some economists were expressing concern about the state of the US economy, the impact of COVID-19 on China and the Russian invasion of Ukraine impacting on the Australian economy.
But he said his role, as he worked on an economic statement to be delivered later this month and a budget in October, was to “focus on what we can legitimately influence”.
These included addressing the labour and skills shortage, providing some cost of living relief, cutting budget waste and boosting child care.
In announcing a 50 basis point rise in the cash rate, Reserve Bank governor Phil Lowe said the Australian economy remained “resilient”, with unemployment at its lowest rate in almost 50 years and job vacancies and job ads at very high levels.
A survey by Compare the Market found 93 per cent of Australians were concerned about a possible recession in the next 12 months.
Of those, 56 per cent were worried about their ability to afford essential things and 39 per cent were concerned about family members in less stable positions.
Shadow treasurer Angus Taylor said the government had yet to deliver an economic plan.
“The response is needed right here and right now,” he told reporters in Canberra.