Australia’s economy has slowed to a crawl, leading to fears that the country may be slipping into a recession.
While the Federal Government says that Australia won’t be following Canada in heading for a recession, the nation’s growth figures are now slower than Greece’s.
The Australian economy recently recorded its lowest growth rate in two years, at just 0.2 per cent in the three months to June 2015. This is well below the average of 3 to 3.25 per cent.
However, former Treasurer Joe Hockey maintains that there is “no risk of recession in Australia”.
Shadow Treasurer Chris Bowen, on the other hand,has said that the government is “in a parallel universe” if it believes the economy is doing fine. This is particularly due to the fact that China’s demand for Australian commodities– a major factor that cushioned Australia from the GFC in 2009 – is falling.
Regardless of whether a recession may or may not be on the cards, Australia’s economy is on shaky ground.
So what does this mean for Australians?
- Higher interest rates. Rising interest rates will mean that those with mortgages and other loans will find it harder to repay their debts.
- A lowering employment rate.
- Reduced spending power. Economic data also shows that the nation’s real net disposable income has slid 1.2 per cent – the biggest drop since the global financial crisis. Reduced consumer spending power, in combination with higher prices charged by local retailers due to the lower Australian dollar, means that many will struggle financially in the foreseeable future.
If you need to speak to a financial advisor, contact Debt Free Australia today. We offer professional and confidential advice for all Australians facing an uncertain financial future. Call one of our insolvency experts for free advice on 1800 676 598.