Deloitte warns Australia faces back-to-back sub-2% GDP growth for first time since 1990-91 recession
AI Market Summary
Deloitte forecasts Australia's GDP growth to run below 2% for two consecutive fiscal years for the first time since the early-1990s recession, with inflation near 4%, falling real wages, and unemployment rising toward 5%. The outlook heightens concerns over stagflation-like conditions and policy uncertainty as the RBA may hike again even as markets price future cuts. This mix is a near-term headwind for AUD and Australian risk assets.
Impact level
● Medium
Affected assets
NCFXAUD2USD/USDT+0.32%
AI Insight · NCFXAUD2USD/USDTAI Insight
▼ Bearish
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Deloitte Access Economics forecasts Australia’s GDP growth will fall below 2% in both this financial year and the next, the first consecutive sub-2% outcome since the 1990-91 recession. It expects inflation to linger around 4% through 2026-27, with real wages contracting and unemployment rising from 4.4% to an average 4.9% next financial year before peaking at 5% the year after. The report also sees the cash rate potentially rising once more to 4.6% in August, even as markets have shifted to pricing in cuts within the period. Western Australia is projected to grow just 0.7% this financial year, the weakest pace nationally.
