It's 'crunch time' for Australian households OCT 6, 2017
Australian households are in a vulnerable financial position, especially those who have taken out a mortgage. And in an era of weak incomes growth, soaring energy prices and high levels of indebtedness, with the prospect of higher interest rates on the way, many intend to cut discretionary spending in anticipation of even tighter household budgets.
That’s the finding of the latest AlphaWise survey conducted by Morgan Stanley, which paints an unsettling picture on the outlook for not only Australia’s retail sector, but also the broader economy..
Australia’s debt-fueled housing bubble has been the main driver of the economy over the last decade via consumer spending as well as growth and increased employment in the construction, banking, real estate and insurance industries. However, a key structural and cyclical reversal in this trend is looming which will unfortunately result in a severe economic recession and a spiraling debt deflation.
