Eslake warns Aust on recession

Bank of America Merrill Lynch analyst Saul Eslake says the Australian economy has a 25 per cent chance of going into recession and warns the nation may have to follow the lead of other countries by effectively printing money, The Australian Financial Review reports.

According to the newspaper, Mr Eslake believes Australia's politicians and policy makers may have "depleted their options" to avoid a downturn.

"Government finances aren’t as strong as they once were ... and interest rates are already low by historical standards," Mr Eslake said.

"We expect the RBA to cut further – to as low as 1 per cent in the event of a recession – and it may need to undertake a ‘Down Under QE (quantitative easing)."

The AFR reports Merrill Lynch puts the odds of Australia slipping into recession in the second half of 2015 at 25 per cent, while it expects gross domestic product to rise one per cent in 2015, and shrink 0.1 per cent in the year following.

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Don't you think to have an analysts comment on there being a '75% probability of no recession' would create a more optimistic view of the future, and be more realistic?
Just don't print money with Julia Gillard's face on it Chances with Australia going into recession with Gillard and Swan in power is 100% Chances of Australia going into recession with the Liberals in power is about 20% The non mining sector ( other than the service sector is currently in recession ). Retain is stuffed. Question is whether anything can replace the mining sector jobs as that sector comes off the boil.
NO! Yes, options to avoid a downturn are few. No, printing money to save the filthy rich – which is the real aim of all such things – will save only a few of them at the expense of the many filthy rich who delude themselves that they have class immunity from ruin. It will merely delay the inevitable collapse, while creating a huge debt that guarantees a Depression. Obviously – as in the Eurozone and the U.S. in due course – the risk and cost of that massive debt will be offloaded onto the 99.9%. As with the “green shoots” of last year, recovery is talked about largely by those who are desperate to believe - or who are desperate to deceive us into believing. Greed and suicidal stupidity do of course go hand-in-hand. But the good times are over. They've plundered, pillaged, looted, and gone, leaving us to clean up the mess and their successors to pretend it didn't happen. Housing, health, and education were once provided by government at far less cost. Six years of a weak stockmarket has demonstrated the fabulously costly failure of Cheating’s privatisation of the pension; super funds now regard the age pension as the Gold Standard for retirement funding. Similarly, private health and private education are notable for their fabulous and ever-increasing cost, despite (until recently) open-ended taxpayer subsidies of these gross profit-seeker failures. Serious money needs to be put back into public provision of a wide range of social and economic services, especially public (not social, public) housing.
Leave the poor old interest rates alone and love your comment John ( about printing money with some ones picture on!!). On a serious note...the AUD looks like its found a home at about 95 cents US. If it starts tracking back up....who would prefer the RBA to make a motherhood statement on the forex trading " we'll keep our dollar matter what it takes", rather than kidding themselves that cutting the cash rate is the way to correct the AUD.
The Australian economy has a 25 per cent chance of going into recession, I prefer to think it has a 25 per ecent chance of not going into recession. Australia is on the slide and those talking things up are living in fairy land and are in complete denial. At a time when things are slowing what are both business and government doing constantly increasing the costv of everyday living expenses which is only speeding up the slowdown. All I can say to both business and government is get used to it, the slowdown has been long overdue
I don't understand Mr Eslake's statement. In Economics there is a 100% chance of a recession, just as there is a 100% chance of a recovery after a recession. If it doesn't happen then economists have studied a theoretical model which they have invariably proven to be false !!! If you don't believe this then you aren't an economist, your graphs are worthless and your Degree is Sh*&*T. I'm not an economist, but I believe in Economics and I will boldly state that there is a 100% chance of a Recession....sometime in the future.