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 slow in its improvement - Full-year GDP forecast for 2025 is revised down to 1.7% from 2.1%. Then, it will remain steady within a range of 2.0- 2.1% throughout 2026–2027, driven by a recovery in household spending and public sector demand.
- Household consumption growth is expected to reach 2.4% by the end of 2026, followed by a slight decline to 2.2% by the end of 2027.
- Business investment is expected to remain subdued until late 2025, while the decline in dwelling investment will hold steady within a narrow range of 2.2% to 2.3% through to 2027.
- The unemployment rate will rise to 4.3% throughout the 2025-2026 and 2025-2027 financial years. These forecasts remain with the estimate of ‘full employment’ of 4-5%.
- Headline CPI inflation is anticipated to rise to 3.1% by mid-2026, reflecting the impact of the expiry of household energy subsidies. The forecast for trimmed mean inflation, which excludes this effect, indicates that underlying inflation will be steady within the target band from mid-2025 until Dec 2027.
- Wages growth will decline from 3.3% to 2.9% at the end of 2027. Although export growth is expected to recover in 2025-2026, the terms of trade are expected to be negative until the end of 2025.
RBA forecasts for the Australian economy (August 2025)
| % change over the year |
Jun 2025 |
Dec 2025 |
Jun 2026 |
Dec 2026 |
Jun 2027 |
Dec 2027 |
| Gross domestic product (GDP) |
1.6 |
1.7 |
2 |
2.1 |
2 |
2 |
| Household consumption |
1.5 |
1.8 |
2.1 |
2.4 |
2.1 |
2.2 |
| Dwelling investment |
5.3 |
4.1 |
2.2 |
2.3 |
2.3 |
2.2 |
| Business investment |
0.6 |
0.3 |
0.6 |
2 |
2.6 |
2.7 |
| Public demand |
3.9 |
2.7 |
3.8 |
3.8 |
3 |
2.4 |
| Gross national expenditure |
2.1 |
2 |
2.4 |
2.7 |
2.5 |
2.3 |
| |
|
|
|
|
|
|
| Imports |
1 |
2.3 |
3.8 |
4.2 |
3.8 |
3.1 |
| Exports |
−0.2 |
1 |
2 |
1.8 |
2 |
1.9 |
| Terms of trade |
−3.4 |
−3.3 |
0.1 |
0.8 |
−0.3 |
−0.5 |
| Real household disposable income |
3.8 |
2.5 |
1.8 |
2 |
2 |
2.2 |
| |
|
|
|
|
|
|
| Unemployment rate (qtr average, %) |
4.2 |
4.3 |
4.3 |
4.3 |
4.3 |
4.3 |
| Employment |
2.3 |
1.6 |
1.4 |
1.4 |
1.4 |
1.4 |
| Average wage rates (WPI) |
3.3 |
3.3 |
3 |
2.9 |
2.9 |
2.9 |
| |
|
|
|
|
|
|
| Trimmed mean inflation (CPI) |
2.7 |
2.6 |
2.6 |
2.6 |
2.6 |
2.5 |
| Headline inflation (CPI) |
2.1 |
3 |
3.1 |
2.9 |
2.6 |
2.5 |
