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Australia Seen Dodging Recession Even as China Economy Slows

  • Rare duo of high export prices, weaker currency aiding economy
  • Property market downturn and high household debt remain risks
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Australia’s economy is expected to avoid recession in the coming year even as its top trading partner China slows sharply on Covid restrictions and rapid US policy tightening raises risks of a downturn there.

Soaring export prices and a weaker currency are bringing a cash windfall Down Under at a time when other developed economies are flashing warning signs. A very tight labor market and still-elevated savings are also helping Australian households cope with rapidly increasing borrowing costs.