Share and Follow
“The government hasn’t prepared our economy. Labor has made decisions in subsequent budgets now which make it harder for the economy to function with international headwinds,” he said.
But while a falling share market may be worrying everyday Australians, experts say we shouldn’t panic about what lies ahead. Here’s why.
Should Australians be worried about a recession?
“The direct effect of the tariffs on Australia is going to be relatively small. The US is only one of our smaller trading partners.”
Technically, a recession is defined as two consecutive quarters of negative GDP.
“That obviously does run the risk that we could end up with higher unemployment here, back to the 4.5 per cent rate for unemployment,” he told Australian Associated Press.
Stock markets around the globe have plummeted in reaction to Donald Trump’s sweeping tariffs. Source: SBS News
What about the stock market crash?
“It tends to overreact. Sometimes it’s right, but many times it’s not. And it could be the case that it’s overreacting a little bit now.”
Australia uniquely positioned to tackle economic uncertainty
“We have a very unique feature of our economy,” Hartigan said. “The Australian dollar is very flexible and it’s likely to collapse — and that will provide a very good cushion to the Australian economy.”
“The RBA can reduce interest rates. It has the flexibility to do that. Markets are expecting a cut next in May and potentially more cuts during the year … so that will provide a cushion to consumers and to businesses.”
