NAB (ASX:NAB) share price lifts despite recession warning

With half the nation in and out of lockdowns, the economic pain is mounting.

| More on:
A businessman holds his glasses in concern, indicating uncertainly in the ASX share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The National Australia Bank Ltd (ASX: NAB) sounded the alarm today on Australia potentially entering a recession this year.

The NAB share price appears unfazed by the forecast, currently up 1.27% to $27.03 in intraday trading.

What's this about a second recession?

Until the COVID-19 pandemic struck in early 2020, Australia had enjoyed a world-beating run of almost 30 years without a recession.

A recession, if you're not familiar, is when a nation's GDP falls 2 or more quarters in a row.

Australia's enviable growth run ended last year when lockdowns shuttered much of the business activity and GDP slipped in both the March and June quarters.

While economists are widely forecasting that GDP will retrace in the current (September) quarter, most analysts – including those at the Reserve Bank of Australia (RBA) – are expecting to see some growth for the 3 months ending 30 June.

The economics team at NAB isn't convinced.

As the Australian Financial Review reports, the bank had been forecasting a 0.4% increase in GDP for the June quarter. That includes "a small detraction of 0.2 percentage points due to Australia's balance of trade".

Now, however, NAB's director of economics and markets Tapas Strickland believes that detraction will be between 1.0–1.9%. And if that loss isn't "made up elsewhere, [it] could see Q2 GDP flat or even potentially negative," according to Strickland.

Noting the risk, Strickland said:

NAB is currently characterising it as a risk given we haven't seen many other GDP partials to date. With Q3 already likely to be deeply negative, it does raise the potential for the 'R' word even before we get to Q4.

The bank's gloomier forecast is based on falling export volumes in the June quarter, mostly iron ore, Australia's top export earner. Which, as the AFR notes, NAB believes probably won't be offset by increased inventories. That's because production caused the slowdown, not shipping.

Whether the RBA has this one right or NAB, Australians will likely be eagerly eyeing an end to lockdowns with hopes the December quarter will see a return to growth.

NAB share price snapshot

NAB's share price gained 54% over the past 12 months. That's more than twice the 24% increase posted by the S&P/ASX 200 Index (ASX: XJO).

Year-to-date the NAB share price has continued its strong performance, up 18% in 2021.

Should you invest $1,000 in Apiam Animal Health Limited right now?

Before you buy Apiam Animal Health Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Apiam Animal Health Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

Woman with a concerned look on her face holding a credit card and smartphone.
Bank Shares

What price target does Macquarie have on ANZ shares following its result?

Is the broker bullish or bearish on this banking giant? Let's find out.

Read more »

A businesswoman on the phone is shocked as she looks at her watch, she's running out of time.
Dividend Investing

Hoping to bank the next dividend from NAB shares? Better hurry…

NAB shares will pay an interim dividend of 85 cents per share next month.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Bank Shares

What does Macquarie think NAB shares are worth after its result?

What do banking analysts think of NAB’s performance?

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Dividend Investing

Why is the Westpac share price falling for a fourth consecutive day?

The Westpac share price is down by more than 4% today.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Here's everything you need to know about the latest ANZ dividend

ANZ just reported its half-year results and announced its interim dividend.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

Which is Macquarie's favourite big four bank right now?

Let's see which bank is this broker's top pick right now.

Read more »

Worried woman calculating domestic bills.
Earnings Results

ANZ share price falls on half-year results

How did the bank perform during the first half? Let's find out.

Read more »

Woman using a pen on a digital stock market chart in an office.
Bank Shares

Here's the Westpac dividend forecast through to 2027

Let's see what analysts are forecasting for the banking giant.

Read more »