Economic News

New National Accounts data from the Australian Bureau of Statistics (ABS) showed the Australian economy grew 0.4% in the June quarter of 2026, taking annual growth to 2.1%.

Australia’s economy expanded by 0.4% in the June quarter of 2026, according to the latest National Accounts data from the Australian Bureau of Statistics (ABS), taking annual growth to 2.1%.

The Reserve Bank of Australia (RBA) confirmed it would leave the cash rate target unchanged at 4.35% at its 10–11 August 2026 meeting, extending the hold that began in June after a tightening cycle earlier in the year.

The Australian dollar has strengthened to around USD 72 cents, reaching its strongest level in roughly three months as changing expectations around interest rates and global economic conditions influence currency markets.

According to the Australian Bureau of Statistics (ABS), household spending increased 1.1% in July 2026, marking the third consecutive monthly increase. Nominal household spending was 7.0% higher compared with the same period a year earlier, reflecting continued consumer activity despite tighter financial conditions.

While none of these factors alone represents an extreme economic shock, their combination is creating a difficult environment forMortgageholders, renters, workers and retirees. Higher borrowing costs are affecting household budgets, employment conditions are becoming less supportive, and essential expenses remain elevated.

Australia is currently facing some of the conditions that can increase stagflation risks. Inflation remains above the Reserve Bank of Australia’s (RBA) target range, while economic growth has moderated. At the same time, energy price movements and global economic uncertainty have added further pressure.