Australia’s economy is facing renewed pressure as fresh data reveals the nation has slipped back into a per capita recession, raising serious concerns about living standards and productivity in the face of high immigration.
According to ABS national accounts released on Wednesday, GDP per capita fell by 0.2% in the March 2025 quarter, meaning the average output per Australian has declined again. While total GDP is still growing slightly, this marks a return to per capita negative growth—a key indicator that many Australians are feeling worse off.
Australia had briefly exited a per capita recession in late 2024, but the latest figures suggest the downturn has resumed, especially as economic output struggles to keep up with rapid population growth.
Productivity Drops Sharply
Adding to the grim outlook, productivity was flat in the March quarter and fell by 1% over the year, pointing to stagnating efficiency across the workforce. Economists warn that lower productivity can drive up inflation, as businesses pass the cost of weaker output onto consumers.
Soaring Immigration Outpaces Growth
The figures also reveal that 437,440 net permanent and long-term migrants arrived in Australia in the year to March 2025. This includes skilled workers and international students, with departures factored in. The continued high rate of immigration is putting strain on housing, infrastructure, and services, while GDP growth remains below trend.
Despite the influx boosting headline economic numbers, it also dilutes per capita output, making everyday Australians feel the economic pain more acutely.
Government Blames Global Pressures
Treasurer Jim Chalmers defended the economy’s overall performance, highlighting global challenges such as Donald Trump’s renewed trade tariffs, which are impacting international markets.
“Our economy continues to grow in the face of substantial economic headwinds at home and abroad,” Chalmers said.
“While overall growth remains subdued, the private sector recovery we have planned and prepared for is gradually taking hold.”
The annual GDP growth rate currently sits at 1.3%, far below Australia’s long-term average of 3%.
No Technical Recession—Yet
Australia is not in a technical recession, which is defined as two consecutive quarters of total GDP decline. But for many households, that distinction offers little comfort as the per capita downturn continues to erode purchasing power and quality of life.
With weak productivity, sluggish growth, and record-high immigration, the Albanese government faces mounting pressure to balance economic expansion with sustainable living standards for all Australians.
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