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Australia’s recession: GDP per capita records three consecutive negative quarters

Australia’s recession: GDP per capita records three consecutive negative quarters

Attending my undergraduate degree in the early 1980s, there was a big focus on gross domestic product (GDP) per capita. This meant economists took out the often-large stimulus from a rising population, and analysis was done over the population of the day.

If we take Australia’s National accounts, for example, the experts have you believe our economy grew at 1.5 per cent in 2023 relative to 2022. However, as the table below illustrates, on a GDP per capita basis, the Australian economy went backwards by 1.0 per cent in 2023. And from a per capita perspective, it went backwards in each of the June 2023 Quarter (-0.2 per cent), the September 2023 Quarter (-0.5 per cent) and the December 2023 Quarter (-0.3 per cent).

Making matters far worse, is the Living Cost Index – which does not include mortgage and other interest payments within the CPI data. 

For “typical” Australian employees the Living Cost Index grew by 6.9 per cent in 2023 relative to 2022. Thankfully, this was down from its June 2023 peak of a whopping 9.6 per cent. Commentators need to stop talking about real wage growth, given the CPI measurement lacks integrity when interest on mortgages have jumped by over $60 billion to an annualised $120 billion from rising interest rates and the expiry of fixed mortgages written when interest rates were at record lows.



GDP per capita

Living Cost Index

March 2023 Quarter




June 2023 Quarter




September 2023 Quarter




December 2023 Quarter




Year to December 2023




To summarise: 13 official interest rate increases from the Reserve Bank of Australia over the 18 Months to November 2023 are (belatedly) starting to bite.  And let’s not forget the historically high net migration, fewer jobs advertised and likely rising unemployment from the current 4.1 per cent. On a per capita basis, Australia is in a recession and on a cost-of-living basis, the average family is feeling the pain.


Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. Steve Purcell

    Totally agree with this. Economists or the so called experts aren’t real. They miss the point big time. Families are struggling and the banks are ripping their customers off. Chasing their customers by phone if they fall behind on their payments is not acceptable in the current situation. Interest rates need to come down by at least 1% immediately for households to cope.

    • Thanks Steve, the idea of an egalitarian Australia is over with unaffordable housing, and consumer debt to disposable income jumping from 60 per cent to 200 per cent in the past 25 years. Younger adults and those that took on enormous mortgages are under financial stress, and there must be levers to transfer intergenerational wealth (for the lucky ones).

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