The Treasury offers the most recent forecast for the Australian economy in its Mid-Year Economic and Fiscal Outlook. Over the next two years it expects:
- GDP growth will improve - GDP growth will recover from 1.4% to 1.75% in 2024-2025 and will pick up throughout 2025-2026 to 2.25%.
- Household consumption growth will be modest in 2024-2025 before recovering in 2025-2026 to 2.0%.
- Business investment will be very weak until late 2025, while a contraction in dwelling investment will improve in 2024-2025.
- The unemployment rate will rise to 4.5% throughout the 2024-2025 and 2025-2026 financial years. These forecasts remain with the estimate of ‘full employment’ of 4-5%.
- Headline CPI inflation will fall back to its target band of 2-3% and remain stable at 2.75% across 2025-2026.
- Wages growth will decline steadily from 4.1% to 3.0% at the end of 2025-2026.
- Although export growth is expected to recover in 2025-2026, the terms of trade are expected to be negative for the upcoming financial year.
Treasury forecasts for the Australian economy (December 2024)
| % change over the year |
2023-2024 |
2024-2025 |
2025-2026 |
| Gross domestic product (GDP) |
1.4 |
1.75 |
2.25 |
| Household consumption |
1.1 |
1.0 |
2.0 |
| Dwelling investment |
-1.4 |
1.0 |
5.0 |
| Business investment |
6.0 |
1.5 |
2.0 |
| Public demand |
4.1 |
3.75 |
2.25 |
| Gross national expenditure |
1.9 |
1.75 |
2.25 |
| |
|
|
|
| Imports |
6.5 |
2.5 |
3.5 |
| Exports |
3.7 |
1.0 |
3.0 |
| Terms of trade |
-6.3 |
-5.25 |
-5.25 |
| |
|
|
|
| Unemployment rate (qtr average, %) |
4.1 |
4.5 |
4.5 |
| Employment |
2.2 |
1.75 |
1.0 |
| Average wage rates (WPI) |
4.1 |
3.0 |
3.0 |
| |
|
|
|
| Headline inflation (CPI) |
3.8 |
2.75 |
2.75 |
