After 21 years of uninterrupted economic growth, the risk of Australia’s economy slipping into recession is growing, analysts say.
A fall in commodity prices, expectations for an imminent peak in mining investment, a cutback in government spending and a relatively high Australian dollar are some of the reasons for the growing pessimism.
Economists say they are particularly concerned because there are few signs that the 200 basis points worth of interest rate cuts since late 2011 are doing much to help out.
“The risk of recession in Australia has certainly gone up,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.
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