The RBA offers the most recent forecast for the Australian economy in its February Statement on Monetary Policy. Over the next two years it expects:
- GDP growth will improve in 2025 - recovering from 1.1% to 2.0% in the June quarter 2025, picking up throughout 2025 to 2.4%, before dropping off slightly at 2.2% in June 2027.
- Household consumption growth will recover in late 2025. Business investment will recover in late 2025, while dwelling investment will be negative.
- Public demand (i.e. government spending) is therefore expected the strongest driver of GDP growth until mid-2025.
- The unemployment rate is expected to be steady at 4.2% for next two years. The forecast remains with the estimate of ‘full employment’ of 4-5%.
- Headline CPI inflation is projected to decline for the rest of this financial year but will increase once household energy subsidies end. The forecast for trimmed mean inflation, which excludes this effect, indicates that underlying inflation will return to the target band by mid-2025 and remain steady at 2.7% until June 2027.
- Wages growth will decline steadily from 3.4% in December 2025 to 3.1% by the end of 2026.
- Although export growth is expected to be in the range of 1.5 -1.8 for next two years while the terms of trade are expected to be weak and negative until mid-2027.
RBA forecasts for the Australian economy (February 2025)
| % change over the year |
Dec 2024 |
Jun 2025 |
Dec 2025 |
Jun 2026 |
Dec 2026 |
Jun 2027 |
| Gross domestic product (GDP) |
1.1 |
2.0 |
2.4 |
2.3 |
2.3 |
2.2 |
| Household consumption |
0.7 |
1.8 |
2.6 |
2.4 |
2.3 |
2.3 |
| Dwelling investment |
2.8 |
0.9 |
-0.4 |
0.3 |
1.3 |
2.5 |
| Business investment |
0.0 |
0.0 |
1.4 |
2.7 |
3.2 |
3.5 |
| Public demand |
4.9 |
5.3 |
4.3 |
4.3 |
4.0 |
3.0 |
| Gross national expenditure |
1.9 |
2.0 |
2.8 |
2.9 |
2.9 |
2.7 |
| |
|
|
|
|
|
|
| Imports |
6.2 |
1.7 |
3.0 |
4.0 |
4.0 |
3.3 |
| Exports |
1.6 |
1.8 |
1.7 |
1.8 |
1.7 |
1.5 |
| Terms of trade |
-4.5 |
0.6 |
0.9 |
-0.7 |
-1.4 |
-1.2 |
| Real household disposable income |
2.2 |
3.1 |
2.5 |
2.4 |
2.2 |
2.3 |
| |
|
|
|
|
|
|
| Unemployment rate (qtr average, %) |
4.0 |
4.2 |
4.2 |
4.2 |
4.2 |
4.2 |
| Employment |
2.7 |
2.8 |
2.0 |
1.6 |
1.4 |
1.4 |
| Average wage rates (WPI) |
3.2 |
3.4 |
3.4 |
3.2 |
3.1 |
3.1 |
| |
|
|
|
|
|
|
| Trimmed mean inflation (CPI) |
3.2 |
2.7 |
2.7 |
2.7 |
2.7 |
2.7 |
| Headline inflation (CPI) |
2.4 |
2.4 |
3.7 |
3.2 |
2.8 |
2.7 |
