AMP Capital and several of the major banks, including CBA, believe the per capita recession was likely. It has also been implied by the Reserve Bank.

It effectively means that population growth is higher than economic growth and that while it may not be a full recession, it may feel like one for some people.

A report from AMP Capital’s Shane Oliver and Diana Mousina said net immigration of 400,000 was now forecast this year.

Added to that was increased unemployment and slower growth.

“Either way, Australia is set to enter a per capita recession,” the report said.

“The Budget has a lot commend it: the cost-of-living measures will help ease pressure on the most vulnerable and some (energy, medicine and rent relief) will lower measured inflation; the budget is now back in surplus for this financial year; by “saving” the bulk of the revenue upgrade budget deficits are lower and this cuts interest costs; the Government has slowed structural spending growth (eg in the NDIS) and raised extra revenue; and there is still scope for revenue surprise with commodity price assumptions.

“With the Budget overall taking more out of the economy than it’s putting back in compared to what was projected last October, it’s hard to see significant implications for the RBA, but it will be wary of the boost to households from the cost-of-living measures which could boost spending.”

A test for many people would be another interest rate rise and the Commonwealth Bank economist Gareth Aird said this was not likely.

“We do not think the RBA will lift the cash rate again if the economic data print in line or weaker than their forecasts,” he said.

While the Budget also had some bleak warnings about economic growth, the ANZ said the Treasury’s forecast was more conservative so the risks were to the upside.