Australia’s economy may avoid a technical recession, but households are living through recession-like conditions, according to Deloitte.

The firm has cut its growth forecast for 2027-28 to 1.7 percent from 1.9 percent, citing weak consumer spending and sluggish productivity.

Deloitte economist Stephen Smith said population growth is masking deeper weakness. Headline GDP keeps rising because there are more people, but output per person is barely growing.

For ordinary Australians, the numbers translate into stagnant living standards. Wages are struggling to keep up with prices, and higher interest rates have crushed discretionary spending.

The report lands days after the Reserve Bank lifted the cash rate to 4.6 percent, adding to mortgage stress for millions of borrowers.

Deloitte argues the real fix is productivity reform: making the economy produce more with the same workers and hours. Without it, the country risks years of going nowhere.

The findings will sharpen the political debate over the government’s economic management.