The updated economic forecasts for 2024 and 2025 show small shifts in expectations for Gross Domestic Product and the Consumer Price Index.
For 2024, the GDP forecast has been slightly adjusted downwards from an initial expectation of 2.0% to 1.8%. The CPI forecast for the same year also saw a slight adjustment, moving from 3.5% to 3.2%. This reduction in the CPI forecast could indicate a more favorable inflation outlook than initially anticipated, and sooner rate cuts, though it’s still some distance from target.
Moving into 2025, the GDP forecast also experienced a slight decrease from 2.4% to 2.3%. This adjustment, while modest, points to a continued expectation of solid, albeit slightly tempered, economic growth. On the inflation front, the CPI forecast for 2025 was revised downwards from 2.9% to 2.8%. This continued trend of mild adjustments in inflation expectations suggests a stabilization of price increases, aligning with targeted inflation rates and indicating a potential easing of rates over time.
But what’s important to keep in mind here is that 2.8% is still at the high end of the RBA’s 2-3% inflation target.
New 2025 forecasts :
| Economic Indicator | December 2025 Forecasts (Old) | December 2025 Forecasts (New) |
|---|---|---|
| Gross domestic product | 2.4% | 2.3% |
| Household consumption | 2.6% | 2.6% |
| Dwelling investment | 3.8% | 2.0% |
| Business investment | 2.0% | 1.8% |
| Public demand | 3.0% | 2.8% |
| Gross national expenditure | 2.7% | 2.7% |
| Imports | 5.0% | 3.9% |
| Exports | 3.3% | 2.4% |
| Real household disposable income | 3.6% | 3.5% |
| Terms of trade | -1.2% | -3.6% |
| Major trading partner (export-weighted) GDP | 3.0% | 3.0% |
| Unemployment rate (quarterly, %) | 4.3% | 4.4% |
| Employment | 1.4% | 1.4% |
| Wage price index | 3.5% | 3.4% |
| Nominal (non-farm) average earnings per hour | 3.8% | 3.8% |
| Trimmed mean inflation | 2.9% | 2.8% |
| Consumer price index | 2.9% | 2.8% |
Here are the new forecasts for December 2024 compared to the previous ones:
| Economic Indicator | December 2024 Forecasts (Old) | December 2024 Forecasts (New) |
|---|---|---|
| Gross domestic product | 2.0% | 1.8% |
| Household consumption | 2.1% | 1.7% |
| Dwelling investment | 2.0% | -1.5% |
| Business investment | 0.3% | 1.2% |
| Public demand | 1.3% | 1.1% |
| Gross national expenditure | 2.0% | 1.9% |
| Imports | 4.1% | 3.9% |
| Exports | 3.6% | 3.1% |
| Real household disposable income | 2.5% | 2.5% |
| Terms of trade | -4.5% | -4.2% |
| Major trading partner (export-weighted) GDP | 3.1% | 3.1% |
| Unemployment rate (quarterly, %) | 4.2% | 4.3% |
| Employment | 1.5% | 1.2% |
| Wage price index | 3.7% | 3.7% |
| Nominal (non-farm) average earnings per hour | 4.2% | 4.3% |
| Trimmed mean inflation | 3.3% | 3.1% |
| Consumer price index | 3.5% | 3.2% |