Australian households were already on edge before the bombs started falling in Iran.

The cost of living was high and inflation was accelerating again, forcing the Reserve Bank to start ratcheting up interest rates.

It’s clear that this is a time of deep uncertainty and anxiety.

Nevertheless, it is striking that more than six in 10 Australians reckon the country is either already in a recession, or will be in the next 12 months, according to a poll conducted for the Nine newspapers.

Just 15% thought the country would avoid a deep downturn, while 22% said they were unsure.

These results – alongside collapsing consumer confidence – reflect a deep and abiding pessimism in the community about the state of the economy.

But the experts do not share this degree of pessimism.

Economists, on average, believe there is a 20% chance of recession in the next 12 months, according to a Bloomberg survey.

That’s not zero, but it’s only up from 15% leading into the Iran war.

Gareth Spence, the head of Australian economics at National Australia Bank, said the Iran war had doubled the chance of a recession to 20%.

That’s a significant increase, but Spence says “the way I am thinking about it is that we could have a bit of a downturn, but not a recession”.

At the moment, the NAB forecast is for growth to slow to 1.5%, from the prewar estimate of 2.2%. That’s a “material downgrade”, Spence says.

Unemployment will rise from 4.3% to 4.8%, he reckons. Again, a meaningful increase, but not much different from where they thought it would be earlier in the year.

Belinda Allen, the head of Australian economics at the Commonwealth Bank, has been tracking the weekly card spending data from the bank’s millions of customers.

So far the figures show that, even after accounting for an unwelcome spike in fuel costs, that spending is holding up and even showing some growth.

There are “pockets” of weakness, Allen says, especially in travel and accommodation as more holidaymakers stayed home through the Easter holidays, and the impact is more evident in regional areas than in the cities.

Allen says the chance of a recession, at least for now, is “negligible”.

“In the aggregate sense, the economy as a whole is holding up.”

It may be that we have only just seen the edge of the oil shock, and the panglossian view of the experts is about to be shattered.

As Spence says, “the worst case is you end up with significant rationing because that is the bit we can’t predict”.

“Obviously prices would be higher, but the physical disruption to sectors like agriculture and transport and then how that flows through is hard to estimate, and could be exponential.”

Hard to estimate, but that hasn’t prevented economists at EY from giving it a go.

They modelled a worst-case scenario where a prolonged closure of the strait of Hormuz leads to physical shortages of fuel and fertiliser.

This scenario delivers a $42bn blow to the economy, concentrated in the transport and construction sectors, and knocks a huge 1.5 percentage points off GDP, putting 160,000 people out of a job.

Cherelle Murphy, EY’s chief economist, says even in this grim scenario the economy as a whole limps along with half a percentage point of growth without outright shrinking in any quarter.

“We don’t quite get there” to a recession, Murphy says.

At this point it’s worth noting that recession is just a word, and the outlook looks bad enough without putting a dramatic label on it.

The term “vibecession” was coined in 2022 in the US to articulate the persistent gap between how Americans said they were experiencing the economy and what the data was saying.

“There has been a shift,” Allen says.

“We get asked a lot of questions around intergenerational equity and wealth transfers. Those big issues are adding up more and adding to this more fractured global environment as well.”

Consumer confidence has never really recovered from the Covid pandemic, here and around the world.

It’s worth keeping this phenomenon in mind. Not as a way to diminish or dismiss the real stresses felt by Australians, but to highlight that there is a degree of catastrophising about the economy that could prove counterproductive.

As the American baseball player Yogi Berra once said: it’s tough to make predictions, especially about the future.

For now, economists predict Australia will struggle through, and Murphy says she and her team will of course be rethinking their scenarios as the year goes on.

“But at the moment let’s manage this. Let’s not think this is the end of, you know, growth as we know it in 2026.”