The RBA offers the most recent forecast for the Australian economy in its November Statement on Monetary Policy. Over the next two years it expects:
- GDP growth will improve in 2025 - recovering from 1.0% to 1.5% in the December quarter 2024, picking up throughout 2025 to 2.3%, before dropping off slightly to be at 2.2% by the end of 2026.
- Household consumption growth will be modest in 2024 and not recover till late 2025. Business investment will be very weak until 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-2026.
- The unemployment rate will rise to 4.3% by the end of this year. It is then expected to lift slightly to 4.4% from the middle of 2025. These forecasts remain with the estimate of ‘full employment’ of 4-5%.
- Headline CPI inflation will fall across the rest of this financial year, then rise when household energy subsidies end. The forecast for trimmed mean inflation – which nets out this effect – indicates underlying inflation will only return to the target band in early 2025.
- Wages growth will decline steadily from 3.4% in December 2024 to 3.2% at the end of 2025.
- Although export growth is expected to recover in December 2024 before easing to around 2.0% throughout 2025 and 2026, the terms of trade are expected to be negative for the next two years.
RBA forecasts for the Australian economy (November 2024)
| % change over the year |
Jun 2024 |
Dec 2024 |
Jun 2025 |
Dec 2025 |
Jun 2026 |
Dec 2026 |
| Gross domestic product (GDP) |
1.0 |
1.5 |
2.3 |
2.3 |
2.3 |
2.2 |
| Household consumption |
0.5 |
1.0 |
2.0 |
2.9 |
2.6 |
2.3 |
| Dwelling investment |
-3.0 |
-0.7 |
-0.9 |
0.5 |
1.3 |
2.0 |
| Business investment |
2.2 |
0.0 |
0.8 |
1.7 |
2.6 |
3.1 |
| Public demand |
3.6 |
4.0 |
4.4 |
3.7 |
3.1 |
3.0 |
| Gross national expenditure |
2.2 |
2.0 |
2.5 |
3.0 |
2.7 |
2.6 |
| |
|
|
|
|
|
|
| Imports |
5.2 |
7.2 |
3.9 |
5.1 |
4.0 |
2.9 |
| Exports |
0.1 |
3.2 |
2.7 |
2.3 |
2.4 |
1.2 |
| Terms of trade |
-3.9 |
-5.7 |
-2.2 |
-0.7 |
-1.2 |
-1.1 |
| Real household disposable income |
0.4 |
3.2 |
3.9 |
2.4 |
2.7 |
2.4 |
| |
|
|
|
|
|
|
| Unemployment rate (qtr average, %) |
4.1 |
4.3 |
4.4 |
4.5 |
4.5 |
4.5 |
| Employment |
2.4 |
2.6 |
2.2 |
1.4 |
1.3 |
1.3 |
| Average wage rates (WPI) |
4.1 |
3.4 |
3.4 |
3.2 |
3.2 |
3.1 |
| |
|
|
|
|
|
|
| Trimmed mean inflation (CPI) |
4.0 |
3.4 |
3.0 |
2.8 |
2.7 |
2.5 |
| Headline inflation (CPI) |
3.8 |
2.6 |
2.5 |
3.7 |
3.1 |
2.5 |
