The economy is unlikely to get into a recession, as it lacks the excesses of past pre-recession economies, according to Shane Oliver, AMP Capital’s chief economist.
Speaking at AMP’s ‘Realise the Possibilities’ workshop, Oliver said that because it’s been the slowest recovery on record, Australia had not seen the excesses that existed in the past.
“I don’t think we are going to have a recession, the risks have gone up, there’s lots of things to worry about, but as long as we avoid a recession, we might still get volatility,” Oliver said.
“But I don’t think it’s going to be a protracted bear market, where a year later we’re down another 20%.”
Oliver said slow wage growth, central banks not ‘slamming on the brakes’, lack of excessive private debt built-up, and a lack of overspending in housing or technology had created positive signs.
“So we haven’t built up the excesses that normally give us a recession, just because the recovery is long in the tooth, doesn’t mean it’s about to collapse,” Oliver said.