The Commonwealth Bank of Australia (CBA) on Friday downgraded its economic forecasts following a recent cash rate increase, saying the country has a 50 per cent chance of sliding into recession this year.
“We put the odds of a recession in 2023 at 50 per cent as the lagged impact of the RBA’s rate increases continues to drain the cash flow of households that carry debt,” Gareth Aird, CBA’s head of Australian economics, wrote in the newly issued Economic Insights.
On Tuesday, the Reserve Bank of Australia (RBA) raised the cash rate target by 25 basis points to 4.10 per cent, with Governor Philip Lowe noting that the annual inflation sitting at 7 per cent is “still too high”.
Read More : Australian Bank Forecasts 50% Probability of Recession in the Country This Year