AMP’s chief economist, Shane Oliver, estimates Australia’s economy has a 45 per cent of recession, while Deloitte Access Economics head Pradeep Philip says the RBA is “playing recession roulette”.

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CME Group senior economist Erik Norland said the risk of a recession in Australia was relatively low because of the shape of the yield curve. While an inversion of the yield curve can indicate a recession, he said in Australia the curve was “fairly flat and very slightly positive, which is a sign of perhaps slowing growth but not an outright downturn” as is the case in the US.

Centre for Independent Studies chief economist Peter Tulip sees the risk of recession in Australia as “extremely unlikely”, putting the likelihood at 6 per cent. While he thinks there is significant risk of the RBA’s tightening monetary policy increasing unemployment, Tulip said “recessions are rare in Australia and preceded by unusual stresses, which we are not seeing at the moment”.

Rival superannuation player Vanguard on Tuesday said it expected the likelihood of recession to be about 50 per cent for Australia.

But Delaney said the central bank would keep leaning into inflation, and that while it would increase the probability of a recession, the RBA would ultimately succeed in taming inflation to a level that is “better than people anticipate” over the shorter term.

Inflation in the medium term, however, could worsen, he said, as structural factors such as tight labour markets, de-globalisation and the energy transition push inflation higher.

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AustralianSuper’s portfolio, which comprises more than $250 billion in member assets, has been geared for a recession after conversations about the prospect arose about a year ago.

“We’re short stocks and long bonds,” Delaney said. “If you’re going to have a recession, bonds are likely to go up ... so we’ve bought a lot of those and funded it predominantly out of stocks and running down our big risk assets.”

The key to managing the downturn, Delaney said, was to “be decisive but avoid precision”.

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