Australian GDP Growth Slows Down to 1.3% in 2026 Amid Inflation Concerns

Australia's economy is expected to record modestly positive GDP growth in Q2, but at a slower pace than last year. According to forecasts, growth will slow down to 1.3% in 2026 from 2.5% in 2025.

The textile and apparel trade sector is facing weak confidence and subdued investment, leading to cautious demand, sourcing, and capacity planning.

Inflation remains a key concern, with underlying inflation above target and higher costs continuing to pass through the economy.

The Reserve Bank of Australia is expected to hold its policy rate at 4.35% through 2026, with a possible rate cut in Q2 2027.