Australia is in a per-capita recession: Here's what you need to know

Australia has avoided a recession in terms of economic growth, but Aussies haven’t been in a worse position personally since 2009.

Video transcript

- Australia is in a per capita recession. Here's what you need to know. Australia has avoided a recession in terms of economic growth, but Aussies haven't been in a worse position personally since 2009. A recession is defined as two quarters of shrinking growth. And according to the Australian Bureau of Statistics, Australia's economic growth per capita fell 0.3% for the second quarter in a row, putting the country in a per capita recession.

Interestingly, increased migration was the major driver for overall growth but also the reason per capita growth shrunk. Co-founder of macro business and MB super chief economist Lee Van Onselen said, "It is clear the main driver of Australia's GDP growth is the Albanese government's unprecedented immigration program. But sadly, the economy is not growing quickly enough to absorb these arrivals, and everyone's share of the economic pie and living standards are shrinking alongside the shortage of rental homes and infrastructure."

So should you be worried? Well, not necessarily. While it's not nice that households have less of a share of wealth and people are undoubtedly struggling right now, it doesn't mean, things are bound to get worse. In fact, some experts think all the data points to the fact that the RBA is likely to be done raising interest rates, and the next move will be a cut further down the line. This would then take pressure off households and hopefully get per capita GDP back in the green.