Australia’s household savings during the pandemic may well protect us from a recession.
Since the onset of the pandemic, Australian households have saved an additional $319 billion over and above what they would normally.
Australia’s cumulative excess savings represent 21.7% of annual household disposable income; significantly higher compared to New Zealand (13.4%) and the U.S. (9.4%).
Whilst recent rate rises present a serious challenge to economic growth the presence of significant household savings puts the Australian economy in a stronger position relative to other countries.
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