The latest economic figures show Australia has been in a recession on per person terms for almost a year. In the December quarter the economy grew at a tepid pace as households slashed spending to cover the cost of essentials. Economists say interest rate cuts could come sooner than expected.
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00:00 The economy may still be growing, but despite a huge population increase, it's slowed to
00:07 a crawl.
00:08 Yeah, it's affecting because everything's gone up. It's becoming very tough for everyone.
00:14 The economy grew by just 0.2% in the December quarter and 1.5% over the year. Businesses
00:21 imported less and made up for it by running down their stocks. Government spending on
00:26 household benefits, employees and the voice referendum also kept GDP out of negative territory
00:33 and it pushed up wages for public servants. But household spending barely rose as people
00:38 cut back on luxuries like dining out to cover the rising cost of essentials.
00:44 Slow growth is still significant growth given the challenging global conditions combined
00:50 with the impact of higher interest rates. Around a quarter of G20 economies have recorded
00:57 a technical recession or narrowly avoided one.
01:01 This hairdresser says the last time business was this quiet was during the early 1990s
01:06 recession.
01:06 And if we go through something similar to that, it's not good. No one's experienced
01:11 that sort of a recession yet and that was nasty.
01:15 These numbers show an economy that's buckling under the weight of 13 interest rate rises.
01:20 While we're not in a technical recession, we would be if it wasn't for population growth.
01:26 On a per person basis, the economy has shrunk for three consecutive quarters.
01:32 So it does suggest that there's risks that the RBA will be cutting rates maybe a little
01:37 bit earlier than November.
01:38 Some reprieve that can't come soon enough for households.
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