Some economists fear there is a growing risk Australia will fall into a recession amid ongoing rate hikes from the Reserve Bank.
The RBA passed a ninth consecutive cash rate rise this week, taking it to 3.35 per cent.
Now, Macroeconomics advisory chief economist Stephen Anthony says there’s a 70 per cent chance of a recession as multiple rate hikes and a slowdown in China’s economy collide.
If Australia enters a recession it could lead to mass mortgage defaults, forced sales of homes, joblessness and a further heightening of the rental affordability crisis.
The federal government is looking to get on the front foot facing the economic challenges ahead.
One step it will take today, is introducing legislation to increase the number of social and affordable homes across the country.
They plan to create 30,000 of those in the next five years.
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There is also a growing expectaction that RBA governor Philip Lowe’s term in charge of the body won’t be extended past September.
Lowe has flagged future rate hikes, with the focus on driving down rising inflation.
”The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,” he said.
“The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
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