During the global financial crisis, the line for how to stimulate and save the economy was “go hard; go households”. The Reserve Bank has adopted the same mantra but in reverse – going hard to ensure households get hurt in order to slow the economy. And the latest gross domestic product figures out on Wednesday show just how well they have succeeded in hurting households and slowing the economy.
The March quarter GDP figures confirm what everyone, except perhaps the RBA, knows – that Australia’s economy is slowing at a precarious rate. Given these figures do not include the impact of the rate rises of last month or earlier this week, and only part of the impact of the rate rises in February and March, there is no reason to think the economy is about to speed up.
