Feeling gloomy about the economy? The ‘vibecession’ has arrived in Australia – but experts are less worried

Australian consumer sentiment is deeply pessimistic—over 60% of people think a recession is imminent—but economists are more sanguine. Bloomberg-surveyed economists put the recession probability at about 20%. Banks and data show spending largely holding up (Commonwealth Bank card data), though travel and regional activity are weaker. NAB has downgraded its growth forecast to 1.5% from 2.2% and expects unemployment to rise to about 4.8%. EY’s worst-case strait-of-Hormuz scenario would knock A$42bn off the economy, cut GDP by 1.5 percentage points and cost roughly 160,000 jobs. The net market implication: Australia-focused assets (including the Australia 200 index) face elevated downside risk and potential volatility from an oil/fuel shock and weaker consumer confidence, but near-term fundamentals and spending data suggest resilience rather than an outright recession.