You can’t eat GDP: why Australian households are in for a massive, historic hit

‘The RBA is predicting an astonishing fall in household incomes … The lack of discussion has me wondering if we need to think more about what the economic and political class considers is vital.’ Photograph: Rick Rycroft/AP

Without any real fanfare and certainly no great coverage, the Reserve Bank of Australia last week let us know that Australian households are about to be smashed.

Other than during exceptional times, such as a pandemic, the RBA or the government don’t usually forecast a recession, thus it is always a bit unsettling to see a central bank suggest bad times are coming. And that is what the Reserve Bank did last Friday in its latest statement on monetary policy.