- Commonwealth Bank was concerned about the weak economy
The Commonwealth Bank has warned that the economy is growing at only half the rate of population growth.
Barring a pandemic, Australia’s economy is already growing at its slowest pace since the 1991 recession, while workplace production continues to decline.
Things are unlikely to improve any time soon, with Commonwealth Bank head of Australian economics Gareth Aird predicting the economy grew by just 1.1 percent in the year to September.
Australia’s largest bank noted that economic growth would be “well below the rate of population growth.” rate of 2.3 percent – proving that a large influx of foreigners does little to grow the economy.
Successive Australian governments over the past two decades have relied on turbo-immigration to boost job creation.
But the Australian economy has also been in per capita recession since the March quarter of 2023, with output for every Australian having shrunk.
“Despite strong population growth, national accounts are expected to confirm that the per capita recession continues,” Aird said.
Productivity is declining and economic activity is weak, despite a large influx of skilled migrants and international students.
The Commonwealth Bank has warned that the economy is growing only half as fast as population growth (pictured is a branch in Sydney)
“The result is that productivity growth is expected to be weak again,” he said.
In the year to September, A net of 449,060 migrants have moved to Australia.
That is significantly higher than the government’s forecast of 260,000 for the 2024-2025 financial year in the May budget.
But population growth is not translating into stronger economic activity after the most aggressive interest rate hikes in a generation.
That’s because high immigration has led to unaffordable house prices, with the average level in Sydney approaching $1.5 million.
Productivity is declining and economic activity is weak, despite a large influx of skilled migrants and international students (stock photo of university graduates)
This means larger mortgages and variable rate borrowers, who are more likely to struggle financially with each interest rate increase.
“Real disposable income per capita has been hit harder in Australia than any comparable economy over the past three years,” the Commonwealth Bank said.
Australia still has an inflation problem, with inflation in the services sector up 4.6 percent in the year to September, while strong population growth continues to push up rental prices.
Commonwealth Bank economists are raising concerns about slow growth in Australia’s economy, just nine months after CEO Matt Comyn told shareholders high immigration was good for profits.
Prime Minister Anthony Albanese and his ministers have promised to reduce immigration by attracting fewer international students
“Undoubtedly, strong population and migration growth is a major tailwind for the Australian economy and it is clear that the Commonwealth Bank is benefiting from higher economic growth,” he said.
Prime Minister Anthony Albanese and his ministers have promised to reduce immigration by bringing in fewer international students.
But the coalition will thwart Education Minister Jason Clare’s plan to cap student numbers at 270,000 by 2025.
The Australian Bureau of Statistics will release national accounts data for the September quarter next Wednesday.