The RBA offers the most recent forecast for the Australian economy in its August Statement on Monetary Policy. Over the next two years it expects:
- GDP growth will improve in 2025 - recovering from 0.9% to 1.7% in the December quarter 2024, picking up throughout 2025 to 2.6%, before dropping off slightly to be at 2.4% by the end of 2026.
- Household consumption will be fairly weak in 2024 and not recover till late 2025. Dwelling investment will contract until mid-2025 before a mild recovery throughout 2026. Business investment will be low till late 2024 before a steady improvement in 2025 and 2026.
- The unemployment rate will rise to 4.3% by the end of this year. It is then expected to rise and be at 4.4% from the mid of 2025 till the end of 2026, all within the RBA’s estimated range of ‘full employment’ of 4-5%.
- Headline inflation will gradually decline from 3.8% to 2.8% in June 2025 easing towards the RBA’s target band of 2-3% before lifting out of the range with 3.7% in December 2025, dropping back to 2.6% by the end of 2026.
- Wages growth will decline steadily from 3.6% in December 2024 to 3.3% at the end of 2025.
- Although export growth is expected to recover from late 2024, the terms of trade are expected to be negative for the next two years.
RBA forecasts for the Australian economy (August 2024)
| % change over the year |
Jun 2024 |
Dec 2024 |
Jun 2025 |
Dec 2025 |
Jun 2026 |
Dec 2026 |
| Gross domestic product (GDP) |
0.9 |
1.7 |
2.6 |
2.5 |
2.5 |
2.4 |
| Household consumption |
1.1 |
1.5 |
2.1 |
2.8 |
2.7 |
2.5 |
| Dwelling investment |
-4.4 |
-1.7 |
-0.7 |
0.3 |
1.1 |
1.9 |
| Business investment |
1.4 |
0.1 |
2.2 |
2.7 |
2.8 |
2.9 |
| Public demand |
4.0 |
4.3 |
4.1 |
3.0 |
2.7 |
2.7 |
| Gross national expenditure |
2.4 |
2.6 |
2.6 |
2.6 |
2.5 |
2.6 |
| |
|
|
|
|
|
|
| Imports |
5.0 |
7.6 |
4.2 |
3.5 |
3.1 |
3.2 |
| Exports |
-0.8 |
2.8 |
3.9 |
3.1 |
2.7 |
2.4 |
| Terms of trade |
-0.9 |
-3.1 |
-3.7 |
-2.4 |
-2.7 |
-2.8 |
| Real household disposable income |
1.1 |
2.6 |
3.0 |
2.7 |
3.3 |
2.7 |
| |
|
|
|
|
|
|
| Unemployment rate (qtr average, %) |
4.0 |
4.3 |
4.4 |
4.4 |
4.4 |
4.4 |
| Employment |
2.7 |
1.9 |
1.2 |
1.4 |
1.5 |
1.6 |
| Average wage rates (WPI) |
4.0 |
3.6 |
3.6 |
3.5 |
3.4 |
3.3 |
| |
|
|
|
|
|
|
| Trimmed mean inflation (CPI) |
3.9 |
3.5 |
3.1 |
2.9 |
2.7 |
2.6 |
| Headline inflation (CPI) |
3.8 |
3.0 |
2.8 |
3.7 |
3.2 |
2.6 |
