Treasurer calms recession fears but admits Aussies face ‘Uncertain times’

6 June, 2024

Treasurer Jim Chalmers has reassured Australians that the country is not heading for a recession, even as the economy shows its weakest growth in nearly three years.

In an interview with Today, Chalmers addressed data released yesterday indicating gross domestic product (GDP) grew by just 0.1 percent in the first quarter of the year. While acknowledging the “very weak” national accounts data from the Australian Bureau of Statistics, he remained optimistic about avoiding a recession.

“The economy barely grew in the first three months of the year. We knew it was going to be weak. And that was the case … people know that the economy is soft and they are under pressure,”

Federal Treasurer Jim Chalmers

He attributed the sluggish growth to last year’s interest rate hikes and persistent inflation, which are contributing to “uncertain times” for many households.

Chalmers emphasised the government’s focus on combating inflation without causing further economic harm, stating, “The most important thing to do is to fight this inflation without smashing the economy and to provide this cost of living help in the most responsible way. And that’s what we’re doing.”

Chalmers highlighted forthcoming measures aimed at easing financial strain, including next month’s tax cuts, energy bill relief, wage increases for award workers, and assistance with rent and student debt. However, inflation remains a significant concern, as underscored by the Reserve Bank of Australia’s (RBA) governor, Michelle Bullock. During a Senate estimates hearing, Bullock stressed that controlling inflation is the central bank’s immediate priority, despite the desire to ease the burden on households struggling with mortgage repayments.

“Inflation is actually the thing that is hurting absolutely everyone,” Bullock stated, underscoring the RBA’s commitment to bringing the Consumer Price Index (CPI) back to target.

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