The RBA offers the most recent forecast for the Australian economy in its May Statement on Monetary Policy. Over the next two years it expects:
- GDP growth will be weak in the short term - falling from 1.5% to 1.2% in the June quarter 2024, slightly improving throughout 2024, and lifting to be at 2.3% by the end of 2025.
- Household consumption and public demand will be fairly weak in 2024 and not recover to late 2025. Dwelling investment will contract until mid-2024 before a mild recovery throughout 2025. Business investment will drop dramatically and be low across 2024 and 2025.
- The unemployment rate will rise to 4.2% by the end of this year within the RBA’s estimate of ‘full employment’ range 4-5%. It is then expected to gradually rise to 4.3% by June 2026.
- Headline inflation will gradually decline from 4.1% to 3.8% in 2024 and will continue easing towards the RBA’s target band of 2-3% by the end of 2025.
- Wages growth will be persistent at 4.2% in the middle of 2024, before gradually declining to 3.4% at the end of 2025.
- Export growth will continue to decline rapidly from recent high levels, and the terms of trade will be negative, for the next two years.
RBA forecasts for the Australian economy (May 2024)
| % change over the year |
Dec 2023 |
Jun 2024 |
Dec 2024 |
Jun 2025 |
Dec 2025 |
Jun 2026 |
| Gross domestic product (GDP) |
1.5 |
1.3 |
1.6 |
2.1 |
2.3 |
2.4 |
| Household consumption |
0.1 |
0.1 |
1.3 |
2.6 |
2.8 |
2.7 |
| Dwelling investment |
-3.1 |
-3.2 |
0.2 |
0.2 |
0.9 |
1.8 |
| Business investment |
8.3 |
1.5 |
0.7 |
1.7 |
2.0 |
2.2 |
| Public demand |
4.6 |
3.2 |
1.5 |
2.1 |
3.0 |
3.2 |
| Gross national expenditure |
1.3 |
1.6 |
1.9 |
2.3 |
2.6 |
2.6 |
| |
|
|
|
|
|
|
| Imports |
3.5 |
1.1 |
4.2 |
3.9 |
4.2 |
4.5 |
| Exports |
4.2 |
0.8 |
2.7 |
2.8 |
2.9 |
3.5 |
| Terms of trade |
-3.9 |
-3.3 |
-4.1 |
-1.4 |
-1.4 |
-1.3 |
| Real household disposable income |
0.3 |
0.8 |
2.9 |
3.4 |
2.1 |
2.3 |
| |
|
|
|
|
|
|
| Unemployment rate (qtr average, %) |
3.9 |
4.0 |
4.2 |
4.3 |
4.3 |
4.3 |
| Employment |
3.0 |
2.1 |
1.4 |
1.2 |
1.3 |
1.4 |
| Average wage rates (WPI) |
4.2 |
4.2 |
3.8 |
3.6 |
3.4 |
3.3 |
| |
|
|
|
|
|
|
| Trimmed mean inflation (CPI) |
4.2 |
3.8 |
3.4 |
3.1 |
2.8 |
2.6 |
| Headline inflation (CPI) |
4.1 |
3.8 |
3.8 |
3.2 |
2.8 |
2.6 |
