The Australian Economy in 2025–26: Domestic Challenges in an Uncertain International Policy Environment

Matthew Greenwood‐Nimmo, Viet Hoang Nguyen, Tim Robinson and Sarantis Tsiaplias

Australian Economic Review, 2026, vol. 59, issue 1, 5-15

Abstract: The Australian economy grew at a moderate pace in 2024–2025. Monetary policy gradually eased through 2025, with three rate cuts bringing the cash rate down to 3.6%. The labour market has softened further from its post‐pandemic state, but a resurgence of inflation in recent months places further monetary easing in doubt. Weak productivity growth remains a major domestic policy challenge. Geopolitical tensions, volatile tariff policies and the prospect of a stock market correction regarding the AI boom are downside risks heading into 2025/2026.

Date: 2026
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