HSBC warns of 50:50 recession risk as Australia faces rate hike
HSBC's chief economist says Australia faces a 50:50 chance of recession next year if another rate rise goes ahead.
HSBC's chief economist for Australia and New Zealand says the economy faces equal odds of recession or recovery. Paul Bloxham told The Nightly that a probable rate hike to 4.85 per cent, the highest in 18 years, risks pushing the economy into contraction in the final quarter of this year or early next year.
Growth has slowed to near-stall speed, he said. A recession would be the first since the 2020 COVID lockdowns and the first sparked by interest rate rises since 1991.
House prices are falling across major cities, with Sydney's outer west and affordable suburbs in Perth, Brisbane and Melbourne dropping 6 to 9 per cent. The falls are hurting investor landlords and homeowners, though younger buyers say lower prices make the market fairer.
- 4.85 per cent
- Cash rate target
- 50:50 chance
- Recession probability
- 6 to 9 per cent
- House price falls
- Four
- Rate rises since February
Why it mattersA recession would cut jobs, cut wages, and squeeze household budgets. Even a 50:50 risk means serious economic pain is coming for many Australians.
