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

Australian Economic Review 2026 Open access

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Authors: Matthew Greenwood‐Nimmo, Viet Hoang Nguyen, Tim Robinson, Sarantis Tsiaplias
DOI: 10.1111/1467-8462.70049
Cited by: 0
References: 4

Abstract

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.

Fields of Study & Subjects

Monetary Policy and Economic Impact Economic Theory and Policy German Economic Analysis & Policies

Publication details

Journal / source
Australian Economic Review
Volume
59
Issue
1
Pages
5–15
Publication date
1 March 2026
Language
EN