Australia warns of slower economic growth
Australian Treasurer Jim Chalmers warned that economic growth could weaken and unemployment could rise as high interest rates and persistent inflation weigh on domestic activity.
The Reserve Bank of Australia has increased interest rates four times in 2026, bringing its benchmark rate to 4.60%. Underlying inflation remains at 3.6%, while unemployment reached a five-year high of 4.7% in September.
Chalmers said the Treasury was revising its economic forecasts ahead of December's mid-year budget update. Despite the weaker outlook, business investment has remained resilient and could grow by more than 5% this year. Financial markets assign approximately a 64% probability to another 25-basis-point RBA rate increase to 4.85% next month. Elevated energy prices could further complicate the balance between inflation control and economic growth.
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