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:
- Growth outlook softens further: GDP growth is expected to soften from 1.9% in June 2026 to 1.4% by the end of 2026 before gradually recovering to 1.8% by December 2028. This suggests a prolonged period of below-trend economic growth.
- Household consumption growth is forecast to slow from 1.8% in June 2026 to 1.6% through 2026 and mid-2027, before picking up modestly to 1.9% by 2028. This points to continued caution among households amid slower income growth and soft economic conditions.
- Business investment is forecast to decline from 6.5% in June 2026 to 3.2% by the end of 2027, dropping further to just 0.2% by December 2028. This indicates a significant slowdown in private-sector investment activity over the forecast horizon.
- The unemployment rate is expected to rise gradually from 4.4% in June 2026 to 4.8% by mid-2028. This is consistent with a gradual easing in labour market tightness.
- Headline inflation (CPI) is projected to decline from 3.9% in June 2026 to 2.8% by mid-2027 and 2.4% by 2028. Trimmed mean inflation is also expected to fall from 3.6% to 2.4% over the same period, returning sustainably to the RBA's 2-3% target band.
- Wage growth is forecast to remain at 3.3% through mid-2027 before easing to 2.9% by the end of 2028 as labour market conditions become less tight.
Overall, the forecasts suggest a period of subdued economic growth, weaker household spending and investment, a gradually softening labour market while inflation is expected to return to the RBA's target range by mid-2027.
RBA forecasts for the Australian economy (August 2026)
| % change over the year |
Jun 2026 |
Dec 2026 |
Jun 2027 |
Dec 2027 |
Jun 2028 |
Dec 2028 |
| Gross domestic product (GDP) |
1.9 |
1.4 |
1.5 |
1.6 |
1.6 |
1.8 |
| Household consumption |
1.8 |
1.6 |
1.6 |
1.8 |
1.9 |
1.9 |
| Dwelling investment |
3.6 |
2.1 |
0.9 |
−0.7 |
−0.8 |
0.0 |
| Business investment |
6.5 |
4.3 |
4.2 |
3.2 |
1.7 |
0.2 |
| Public demand |
3.6 |
3.2 |
3.1 |
2.8 |
2.6 |
2.2 |
| Imports |
6.1 |
3.6 |
2.9 |
3.2 |
2.5 |
2.2 |
| Exports |
2.4 |
0.0 |
0.6 |
0.7 |
1.3 |
2.0 |
| Terms of trade |
−3.1 |
−2.8 |
0.7 |
0.5 |
0.5 |
1.1 |
| Unemployment rate |
4.4 |
4.5 |
4.6 |
4.7 |
4.8 |
4.8 |
| Employment |
1.1 |
1.4 |
1.2 |
1.1 |
1.1 |
1.2 |
| Wage price index |
3.3 |
3.3 |
3.3 |
3.1 |
3.0 |
2.9 |
| Trimmed mean inflation |
3.6 |
3.3 |
3.0 |
2.6 |
2.4 |
2.4 |
| Headline inflation (CPI) |
3.9 |
3.6 |
2.8 |
2.6 |
2.4 |
2.4 |
