Last updated: September 11, 2026
Australia’s economic recovery has gathered pace, moving from a year-on-year real GDP growth rate of 0.82% in Q3 2024 to a peak of 2.61% in Q4 2025, before moderating to 2.14% by Q2 2026. Despite this expansion in output, the broader economy continues to operate with spare capacity, as illustrated by an output gap that remains negative, moving from -0.32% of potential GDP in 2024 to -0.64% in 2026 and projected at -0.92% in 2027. Labor market conditions reflect this shifting momentum, with the unemployment rate moving in a range between 4.08% in January 2026 and 4.49% in April 2026, resting at 4.46% in the latest July 2026 reading.
Price pressures have remained a central preoccupation for policymakers. CPI inflation fluctuated over recent months, moving from a reading of 3.76% in December 2025 to a high of 4.57% in March 2026 before easing back to 3.45% in July 2026. In response to these persistent inflationary dynamics, the Reserve Bank of Australia adjusted its policy rate upward from 3.6% in January 2026 to 4.35% by May 2026, holding it steady at that level through July 2026.
On the fiscal front, government finances demonstrate a consistent deficit between incoming revenue and outgoing expenditure. Government revenue across the recorded quarters ranged from a low of 232.39 billion of national currency in Q3 2024 to a high of 274.65 billion of national currency in Q4 2025 (reaching 265.0 billion of national currency in Q1 2026), while expenditure moved from 262.94 billion of national currency in Q3 2024 up to 290.2 billion of national currency in Q4 2025, landing at 277.73 billion of national currency in Q1 2026. Official government debt rose from 59.14% of GDP in Q3 2024 to 63.26% of GDP by Q1 2026.
No sector balance data is available for Australia.
In foreign trade, Australia maintains a consistent goods trade surplus with the world. Goods exports ranged from a peak of 412,540.27 million of national currency in 2022 down to 337,766.78 million of national currency in 2025, while goods imports moved from 214,734.62 million of national currency in 2020 to 315,252.5 million of national currency in 2025.
Energy vulnerability remains minimal. Net electricity imports stood at 0.0 billion kWh annually across the eight-year period from 2017 to 2024, representing an immaterial figure for the economy. Meanwhile, global input costs showed significant volatility, with the Brent crude oil price moving from 61.81 US dollars per barrel in December 2025 to a peak of 103.84 US dollars per barrel in May 2026, before settling at 83.73 US dollars per barrel in July 2026. Domestically, export revenues faced exposure to commodity price swings via iron ore, which traded between 100.97 US dollars and 111.63 US dollars per month over the final eight months.
The currency's movement against the IMF Special Drawing Right (SDR) basket showed periods of both strengthening and weakening. The exchange rate moved from 2.1 units of currency per 1 SDR in August 2025 to a stronger position of 1.91 units of currency per 1 SDR in May 2026, before edging back to 1.97 units of currency per 1 SDR in July 2026 and returning to 1.91 units of currency per 1 SDR in September 2026. This firmer currency stance has helped buffer the economy against imported price pressures during a volatile global commodity cycle.
Australia's economy displays resilience amid stabilizing growth and cooling inflation, allowing the Reserve Bank of Australia to pause its rate hikes. Nevertheless, persistent fiscal deficits and a negative output gap suggest that underlying domestic demand still requires careful navigation.
This bulletin is generated with AI assistance from the structured economic data collected across this site (national accounts, sector accounts, trade, energy and currency data). It is intended as an accessible summary, not investment advice — figures may be revised as underlying data sources are updated. For the detailed underlying series, see the Nation Account Data and Economic Data sections in the menu above.