A German investment bank has released a grim forecast for Australia’s economy in 2023, warning of a disastrous 12 months for the country.
Deutsche Bank predicts that Australia will enter recession in 2023 due to a further slowdown in the economy and soaring unemployment.
The bank’s definition of a recession, however, differs from the traditional two consecutive quarters of negative economic growth (GDP).
Deutsche Bank based its forecast on its expected unemployment rate.
“We expect Australia’s unemployment rate to end 2023 at 4.5%, up one percentage point from the current unemployment rate of 3.5%,” the chief economist said. of Deutsche Bank, Phil O’Donoghoe, according to the ABC.
Modeling conducted by the RBA predicts a much lower figure, with an unemployment rate of 3.7% expected by the end of next year.
Mr O’Donoghoe backed the bank’s prediction and argued the GDP measure was ‘useless for Australia’.
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“If our forecast comes true, this would be considered a recession by our definition, even if – as our forecast assumes – gross domestic product (GDP) avoids two consecutive quarters of negative growth,” he said.
“We have long considered the ‘technical’ definition of recession to be singularly unnecessary for Australia. From a welfare perspective, a one-percentage-point increase in the unemployment rate in one year is a much more useful description.
Unemployment rose for the first time in 10 months in August.
There were, however, more Australians than ever working more than one job.
The number of people moonlighting hit a record high of 900,000 people in the June quarter of 2022, an increase of 4.3%, according to figures released by the ABS.
ABS Labor Statistics Officer Lauren Ford said the figure represented 6.5% of all those officially employed.
“This is the highest rate since the quarterly series began in 1994, and about 0.5 percentage points above its pre-pandemic level,” she said.
“Along with the 4.3% increase in the number of people working multiple jobs, the number of jobs held as secondary jobs also increased, by 5.5%, and exceeded one million for the first time. . »
The official unemployment rate remains the lowest since August 1974, when it was 2.7% and the ABS released figures on a quarterly basis instead of monthly.