Perpetual Investments' head of investment research Matt Sherwood says the "one-dimensional view" of his former Sydney University economics professor conveniently ignores the economy's resilience and diversity against the odds.

Varoufakis, who earlier this year led Greece's do-or-die debt negotiations, on Monday told Fairfax that Australia's fortunes were tied to China's, and that slowing growth in the world's second-biggest economy would ultimately drive the country into recession.

After nearly 25 years without two consecutive quarters of contraction, Australia was due a correction, he said.

"There will be a recession in Australia, because of the collapse of investment and because of the collapse of animal spirits – and this is because of what's happening in China," he said.

While agreeing that the massive decline in resource-related and public sector investment had dragged heavily on Australia's growth rate, Sherwood says the economy's services-and-housing-led rebalancing was well under way.

Economy still growing

"This is the amazing thing, and this is why I think Yanis is completely wrong," Mr Sherwood said.

"We're having a decline in mining investment, which is the largest in a century and a half.

"We have had governments detract from growth in the last five years, which is something you haven't seen in the national accounts for the best part of five decades.

"And despite those two one-off hits, the economy is still growing at 2 per cent."

His comments come as the Australian Bureau of Statistics prepares on Wednesday to release third-quarter national accounts. These are expected to show that the economy expanded at between 0.7 and 0.9 per cent in the three months to the end of September, to give an annual growth rate of around 2.4 per cent. This compares with 0.2 and 2 per cent, respectively, for the June quarter.

After another sharp decline in business and government investment, stronger-than-expected growth in net exports has come to the rescue, with household consumption and housing investment also helping keep growth positive in the quarter.

This, according to Sherwood, is what Varoufakis has failed to take into account.

"The big thing with Dr Varoufakis' view is that if you have that one-dimensional view of the economy based on the relationship between China and investment, you could come to a conclusion about an economic contraction," he said.

"But there are many other parts of the economy which are offsetting that impact."

Solid consumer spending

"We are getting solid growth in consumer spending; we're getting good growth in trade.

"There's still a very solid contribution from housing."

He conceded that while the Australian economy would avert technical recession, there was a so-called "income recession" because of the country's declining terms of trade, which is the relative price of exports to imports.

"I don't think the biggest risk to the economy is from recession, but it's the fact that we are producing more but we're earning less, because of the contraction in the terms of trade," he said.

"If an economy is earning less, you could question how much consumers continue to spend, and how much more they'll invest in housing.

"As a result you could question the level of rebound you would get in the non-mining sector.

"However, given those two big contractions in public spending and mining, I tend to think if we can still grow at 2 per cent, then the Australian economy doesn't have too many risks to it, other than some cataclysm in China," he said.

Sherwood's view reflects his broader peer outlook for Australia, with the vast majority of economists forecasting further declines in resource-related investment in 2016, and only a sluggish pick-up in other sectors of the economy.

Citi's chief economist for Australia Paul Brennan says that although new liquid natural gas projects in northern Australia will boost export revenues, weak wages growth and a fading wealth and investment effect from cooling house prices will hold down domestic demand.

"Housing will still be contributing to the economy, but not as much as it did this year," he said.

And Yanis Varoufakis' recession prediction?

"We've got this view of grinding, below-trend growth and then at some point you think that investment has to come along, even if it is very moderate and in very selective areas," Mr Brennan said.

"But certainly you have to give [recession] a reasonable probability, just because it has been a long period without recession.

"But in some ways, that idea misses the point that, within this long period of 25 years there have been cycles in which you've had growth dip, you've had unemployment rise, you've had growth pick up again and all the rest of it.

"Those who say we haven't had a recession for so long, and we've had all these bad things happen recently and therefore it's inevitable that we have a couple of quarters of negative growth, it's possible but it over-simplifies what has been happening," he said.