VIEW:  Deloitte Believes Further Tightening Could Result In Recession

In contrast to Citi, the Deloitte Access Economics’ Business Outlook report is pessimistic. They expect the increase in mortgage payments to reduce consumption and drive a slowdown in the economy to 1.7% this year from 3.6% in 2022.

• Partner Smith said “The combination of falling house prices, rising interest rates, high inflation, low levels of consumer confidence and negative real wage growth (are) expected to combine to see spending growth decelerate markedly over coming months.”
• He also believes that any further rate hikes could risk “unnecessarily” pushing Australia into a recession. Smith noted that “There is no doubt that Australian households are starting to hurt”.
• Deloitte’s is forecasting household consumption growth to fall to its lowest since the financial crisis.
  - The Australian