Australia's Economy Slows to Modestly Positive Growth in Q2

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

The Reserve Bank of Australia (RBA) is expected to keep its policy rate at 4.35% through 2026, with the next move likely to be a rate cut from the second quarter of 2027.

Business investment is expected to remain subdued, with underlying investment growth forecast to slow to 3.7% year on year by the end of 2026 and 1.6% by the end of 2027.