Bushfires could force Australia into a recession

Bushfires could force Australia into a recession experts have noted, as consumers reign in their spending and struggling businesses start to fail.

Consumer spending and retail trade was already significantly down before the bushfires began. The past financial year was the worst on record, since the 1991 recession.

Wages have also been growing at below average levels, since 2013. Agricultural production will also be hit hard.

On Monday, Prime Minister Scott Morrison announced a $2billion rebuilding fund to help Australians affected by the bushfires. It will be some time, before we see any effect from these measures it is thought.

The Reserve Bank of Australia is widely expected to cut interest rates in February by a quarter of a percentage point, which would take the cash rate to a new record-low of 0.5 per cent.