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 to slow in the short term - falling from 1.5% to 1.3% in Jun 2024 before gradually improving throughout 2024, and lifting to be at 2.3% by the end of 2025.
- Household consumption and public demand to be weak in 2024 and fairly weak in 2025. Dwelling investment will contract in until the end of 2024 before it recovers in 2025. Business investment will drop dramatically and be low across 2024 and 2026.
- The unemployment rate will rise to 4.3% by the end of 2024, within the RBA’s estimate of ‘full employment’ of between 4-5%. It’s then expected to lift to 4.4% for the next two years.
- Headline inflation will decline from 4.1% to 3.2% in 2024, and continue dropping towards 2.6% in June 2026. Inflation is expected to fall RBA’s target band of 2-3% at the end of 2025.
- Wages growth will peak at 4.1% in the middle of 2024 before gradually declining to 3.2% in June 2026.
- Export growth will continue to decline rapidly from recent high levels from 5.3% to 3.1% in 2024, and the terms of trade will be negative, for the next two years.
RBA forecasts for the Australian economy (February 2024)
| % change over the year |
Dec 2023 |
Jun 2024 |
Dec 2024 |
Jun 2025 |
Dec 2025 |
Jun 2026 |
| Gross domestic product (GDP) |
1.5 |
1.3 |
1.8 |
2.1 |
2.3 |
2.4 |
| Household consumption |
0.4 |
0.8 |
1.7 |
2.4 |
2.6 |
2.6 |
| Dwelling investment |
-0.2 |
-1.6 |
-1.5 |
0.3 |
2.0 |
3.5 |
| Business investment |
7.6 |
1.2 |
1.2 |
1.6 |
1.8 |
2.2 |
| Public demand |
4.0 |
2.2 |
1.1 |
2.1 |
2.8 |
3.0 |
| Gross national expenditure |
1.4 |
1.5 |
1.9 |
2.4 |
2.7 |
2.7 |
| |
|
|
|
|
|
|
| Imports |
6.0 |
2.6 |
3.9 |
4.0 |
3.9 |
4.2 |
| Exports |
5.3 |
2.1 |
3.1 |
2.5 |
2.4 |
2.7 |
| Terms of trade |
-4.1 |
-1.1 |
-4.2 |
-5.0 |
-3.6 |
-2.5 |
| Real household disposable income |
-1.5 |
-0.8 |
2.5 |
3.9 |
3.5 |
2.7 |
| |
|
|
|
|
|
|
| Unemployment rate (qtr average, %) |
3.8 |
4.2 |
4.3 |
4.4 |
4.4 |
4.4 |
| Employment |
3.0 |
2.0 |
1.2 |
1.2 |
1.4 |
1.5 |
| Average wage rates (WPI) |
4.1 |
4.1 |
3.7 |
3.6 |
3.4 |
3.2 |
| |
|
|
|
|
|
|
| Trimmed mean inflation (CPI) |
4.2 |
3.6 |
3.1 |
3.0 |
2.8 |
2.6 |
| Headline inflation (CPI) |
4.1 |
3.3 |
3.2 |
3.1 |
2.8 |
2.6 |
