All will be revealed next Wednesday with the release of the December quarter GDP result. In the September quarter, GDP fell 0.5 per cent which opened the door for the notion of a recession, which is often defined as two consecutive quarters of negative GDP growth.
No one is expecting a second quarter of falling GDP – that will be the good news next week. The less rosy news will be confirmation that the economy will likely be entrenched in a 2 to 2.5 per cent annual growth rut, being unable to lock in a sustained 3 per cent pace which is essential if inflation is to get back into the RBA target range and for there to be inroads into Australia’s high unemployment rate.
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