The probability of recession in Australia is low, but a period of contraction in the economy can’t be ruled out, the Reserve Bank of Australia says. Philip Lowe, deputy governor at the Reserve Bank of Australia, said despite the country’s record of 24 years without recession, predictions of unending expansion would be misplaced.
“The probability of recession is low, but there is a probability that at some point we will have a downturn,” Mr Lowe told a conference. “The idea that the Australian economy can just keep growing without having short periods of contraction is a mistake. What we should be hoping for is that, when those periods inevitably happen, that they are short-lived,” he added.
Mr Lowe said the RBA still retained an upbeat view of the economy. “We think the economy’s on a gradually improving track; that the unemployment has stabilised; that growth has been 2.0 per cent to 2.5 per cent for a while, but will gradually pick up,” he said.