Caution: Higher August interest rates may lead to a potential economic downturn.

Economists are expressing concerns over Australia's economy, warning that it could potentially fall into a recession if the Reserve Bank makes hasty decisions during their upcoming meeting. According to a recent report by Deloitte Access Economics, the nation's economy would already be on the brink of a recession if it weren't for the stage 3 tax cuts implemented by the federal government. All eyes are on the vital inflation figures to be released next month, just before the RBA board convenes on August 5 and 6.

Deloitte states that the Australian economy is at a critical point, with weak economic growth and persistently high inflation. It's a fork in the road for the RBA, where both options have significant impacts on households and businesses. On one hand, if the June quarter trimmed mean inflation result is high, the RBA would have to raise interest rates in early August. However, this could further damage confidence in households and businesses, negating the benefits of tax cuts and wage increases in the latter half of 2024. On the other hand, if the inflation result is more moderate, the RBA may choose to keep interest rates steady, allowing for a steady recovery in economic growth in the upcoming year.

Australia's economic growth has been sluggish in recent times, with record-high interest rates and stubborn inflation hindering progress. In the first quarter of the year, the economy only grew by 0.1%, bringing the annual growth rate to 1.1%. Deloitte predicts a growth rate of 1% for the entire year of 2024. These factors highlight the delicate state of Australia's economy and the potential consequences of the RBA's decisions.

In the midst of this economic uncertainty, all eyes are also on the upcoming Olympic Games in Paris 2024. Channel 9 and 9Now will be broadcasting every moment and medal live and free, while Stan Sport will provide ad-free and 4K coverage of every event. It's a welcome distraction and a source of excitement for many Australians during these challenging economic times.

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