Feeling gloomy about the future? You’re not alone. New data shows economic pessimism is growing in Australia, and the implications reach far beyond the hip pocket.

The latest Lowy Institute poll shows a sharp decline in economic optimism, with just 41% of Australians feeling optimistic about Australia’s economic performance in the world over the next five years. This is the first year in which pessimism has outstripped optimism since the question was first asked in 2005.

Recent analysis of a survey on social cohesion by the independent Scanlon Foundation tells a similar story: Australians have become less hopeful about their personal futures and the nation’s future.

So what is economic pessimism, why does it matter, and what can we do about it?

This is a warning sign

First, a reality check. Australia performs well across a suite of international economic and social measures – ranking highly on life expectancy, human development, employment, and economic growth per person, as well as self-reported life satisfaction. We are also one of the world’s leading democracies.

But even if there’s nowhere in the world we’d rather be, Australians are still feeling down and are worried about the future.

A recent Grattan Institute report showed that while Australians........

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